|
Broadcom to buy SiByte
|
 |
November 6, 2000: 12:26 p.m. ET
Broadband chip maker adds to acquisition binge with $2B deal
|
NEW YORK (CNNfn) - Broadcom Corp., a leading maker of chips and software for high-speed data transmission, said Monday it had agreed to buy SiByte Inc., a maker of processor chips for networking and communications applications, for about $2 billion in stock.
 Under the deal, Broadcom (BRCM: Research, Estimates) will issue up to 9.3 million shares of its common stock in exchange for privately held SiByte's preferred and common stock. Broadcom's stock declined $2.56 to $219.81 Monday morning in response to the news.
Santa Clara, Calif.-based SiByte makes chips that do the processing needed to manage and move data at rates ranging from one gigabit-per-second to 40 Gbps. Its chips are targeted at the networking and communications markets, including high-speed Local Area Networks, Metropolitan Area Networks, and Wide Area Networks.
SiByte was founded in 1998 by three executives from Digital Equipment Corp., including Dan Dobberpuhl. While at DEC, Dobberpuhl was responsible for the development of the world's fastest and most power-efficient commercial microprocessors, the Alpha and StrongARM, respectively.
Last May, SiByte said it had obtained $40 million in funding from Bowman Capital, ATI Technologies Inc (ATYT: Research, Estimates), Cisco Systems (CSCO: Research, Estimates), Juniper Networks Inc. (JNPR: Research, Estimates), and Raza Venture Fund A.
Irvine, Calif.-based Broadcom is the dominant provider of chips for cable modems, cable television set-top boxes, and xDSL equipment. Its revenue exploded to $518 million in 1999 from just $42 million in 1997. This year, its third-quarter revenue reached a record $319 million, an increase of 129 percent from the $140 million reported in the third quarter of 1999. Its pro forma net income was a record $78.7 million, or 30 cents per share.
String of acquisitions
The purchase of SiByte adds to a string of acquisitions Broadcom has made over the past several months.  In October, Broadcom said it would acquire Allayer Communications, a provider of enterprise and optical networking communications chips, in a stock swap valued at $340 million.
And in August, Broadcom acquired communications chip maker Silicon Spice Inc. for $1.2 billion in stock, and optical communications chip maker NewPort Communications Inc. for about $1.2 billion.
"The acquisition of SiByte complements our recent acquisitions of NewPort Communications and Silicon Spice and our pending acquisition of Allayer Communications and significantly expands Broadcom's product portfolio for Internet infrastructure equipment," Broadcom president and CEO Dr. Henry T. Nicholas III said.
The company said it will issue 5.6 million shares when the SiByte deal closes and another 3.7 million shares if certain performance goals are met. 
|
|
|
|
|
|
Broadcom
Sibyte
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
