Monday, March 21, 2011

Broadcom acquires Provigent for $313M

IRVINE, Calif., March 21, 2011 /PRNewswire/ -- Broadcom Corporation (Nasdaq: BRCM), a global leader in semiconductors for wired and wireless communications, today announced that it has signed a definitive agreement to acquire Provigent, a privately-held leading provider of highly integrated, high performance, mixed signal semiconductors for microwave backhaul systems, with offices in Israel and Santa Clara, Calif. Broadcom provides one of the industry's broadest portfolios of Ethernet networking solutions for service provider infrastructure including the mobile backhaul. With the addition of Provigent's engineering expertise in microwave radio products, the company expands its robust portfolio to more thoroughly address the $5B microwave backhaul equipment business(1).

In order to manage the exponential growth in wireless traffic and transition to 4G, carriers are faced with the challenge of backhauling data from the cell sites to the core network. Microwave backhaul is the most prevalent type of technology used in the multi-billion dollar global mobile backhaul business, representing greater than 50 percent of all solutions(1).

"Provigent is a unique asset with world-class microwave backhaul technology and strong engineering talent developing innovative and highly integrated semiconductor solutions for the microwave segment," said Rajiv Ramaswami, Executive Vice President and General Manager of Broadcom's Infrastructure and Networking Group. "Combining their microwave backhaul solutions with our industry leading network infrastructure and wireless solutions allows us to better serve our customers and expand our addressable market."

"Provigent's System-on-Chip (SoC) solutions are used to solve a crucial problem in the infrastructure of cellular networks, which is the backhaul bottleneck," said Dan Charash, Chief Executive Officer, Provigent. "The many synergies with Broadcom's broad portfolio of wireline and wireless SoC technologies and capabilities will accelerate product development and provide our customers with a compelling offering."

In connection with the acquisition, Broadcom expects to pay approximately $313 million, net of cash assumed, to acquire all of the outstanding shares of capital stock and other equity rights of Provigent. The purchase price will be paid in cash, except that a portion attributable to certain unvested employee stock options will be paid in Broadcomrestricted stock units. A portion of the cash consideration will be placed into escrow pursuant to the terms of the acquisition agreement. Broadcom expects the acquisition of Provigent to be neutral to earnings in 2011. The boards of directors of the two companies have approved the merger. The transaction is expected to close in Broadcom's second quarter, 2011, and remains subject to the satisfaction of regulatory requirements and other customary closing conditions.

About Provigent

Provigent is a leading supplier of SoC solutions for the Broadband Wireless Transmission industry. Provigent's field-proven, mass production SoC solutions offer significant system level enhancements while lowering overall system cost. With an established economy of scale, significant R&D investments and a focused dedication to the Broadband Wireless Transmission industry, Provigent continues to establish itself as a leading SoC provider. More information is available on the Web at www.Provigent.com or via e-mail at info@provigent.com.

(1) Infonetics Mobile Backhaul Equipment Revenue Forecast (4Q10), $5.2B in revenue by 2014

About Broadcom

Broadcom Corporation is a prominent technology innovator and global leader in semiconductors for wired and wireless communications. Broadcom products enable the delivery of voice, video, data and multimedia to and throughout the home, the office and the mobile environment. We provide the industry's broadest portfolio of state-of-the-art system-on-a-chip and embedded software solutions to manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices. These solutions support our core mission: Connecting everything®.

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