Broadcom Acquires SiByte for US$2 Billion

Integrated circuit maker Broadcom continued a buying spree and announced Monday that it will acquire SiByte Inc, a developer of chips for networking and communications applications. The acquisition is worth approximately $US2 billion, Henry T. Nicholas, president and chief executive officer (CEO) of Broadcom said in a live Webcast.

SiByte's high-performance network processors will complement Broadcom's IP (Internet Protocol) switches, communications digital signal processors, IP security products and physical layer transmission products, Broadcom said in a statement. The SiByte technology will be embedded into Broadcom products within 12 months, Nicholas said during the conference call.

"This will give us a leadership role in the network processor market as well as the wide area network (WAN) marketplace," Nicholas said.

Dan Dobberpuhl, SiByte's president and CEO, will be added to Broadcom's senior management and technical team.

In connection with the acquisition, Broadcom will issue up to 9.3 million shares in exchange for all outstanding shares of SiByte. The merger transaction is expected to close within 60 days. Broadcom said it expects to record a one-time charge related to the acquisition in its fourth fiscal quarter, ending Dec. 31.

According to Broadcom, SiByte has won multi-year purchase contracts for total quantities in excess of 1.3 million units at multi-hundred dollar average selling prices (ASPs).

"We are not disclosing the customer's names yet. The deals SiByte has done do show what kind of hole this fills within the network processor marketplace."

The boards of directors of both companies have approved the merger. SiByte's shareholders, as well as regulators, still have to approve the deal. Broadcom's acquisition of SiByte follows those of NewPort Communications Inc. and Silicon Spice Inc., both in the first half of August. NewPort Communications makes optical communications chips. Silicon Spice develops semiconductor technology, software and development tools for high-density voice, fax and data packet transport over WANs (wide area network).

Broadcom, in Irvine, California, can be contacted at http://www.broadcom.com/.

SiByte, in Santa Clara, California, can be contacted at http://www.sibyte.com/.

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