Broadcom to Acquire WIDCOMM, the Industry's Leading Provider of Critical Software for Bluetooth® Wireless Devices
Armed With Both Leading Software and Silicon, Broadcom Is Uniquely Positioned to Deliver Optimized Solutions and Accelerate Its Growth in the $800 Million* Bluetooth Market
IRVINE, Calif. and SAN DIEGO, April 19 /PRNewswire-FirstCall/ -- Broadcom Corporation (Nasdaq: BRCM), a leading provider of highly integrated semiconductor solutions enabling broadband communications, today announced that it has signed a definitive agreement to acquire WIDCOMM, Inc., a privately-held, San Diego-based company that is the leading provider of software solutions for Bluetooth® wireless products. The combination of WIDCOMM's industry-leading software and Broadcom's leading Bluetooth semiconductor portfolio enables Broadcom to provide the industry's most complete and optimized system solutions. With WIDCOMM® software shipping in nearly 100 end products from more than 80 customers, the acquisition also instantly enlarges Broadcom's customer base.
Every Bluetooth device requires a software stack, and WIDCOMM's stacks have been broadly adopted within the Bluetooth industry, providing the highest level of assured interoperability. Leading systems and silicon providers rely on WIDCOMM's software to enable cable-free communications between mobile phones, headsets, handheld computers, mice and keyboards, and multiple other products. WIDCOMM boasts an extensive set of top-tier customers in the Bluetooth industry, including Dell, Hewlett-Packard, IBM, Logitech, Panasonic, Samsung, and Sony, among many others. WIDCOMM's software also includes a complete suite of Bluetooth usage profiles, providing vital device-specific functionality for nearly every major Bluetooth chip vendor. With its leading position in Windows®-based as well as embedded implementations, WIDCOMM's footprint in the Bluetooth space is unmatched by any other third-party software supplier, with an estimated market share of greater than 50% of all PC Bluetooth designs, according to internal company estimates.
"The combination of Broadcom's silicon and WIDCOMM's software comprises the most extensive Bluetooth portfolio in the industry," said Joyce Putscher, Director of Convergence Research at In-Stat/MDR. "The acquisition of WIDCOMM should provide many more opportunities for adoption of Broadcom Bluetooth silicon in this rapidly growing market in which we expect to see a 60% annual growth rate for chipsets over five years."
"Through our extensive joint development work, Broadcom has gained a strong level of confidence in WIDCOMM's products and has developed an excellent working relationship with its team," said Alan E. Ross, President and CEO of Broadcom. "This strategic acquisition demonstrates Broadcom's strong commitment to our Bluetooth customers, and is intended to advance our competitive position in this lucrative market."
Broadcom is a leading supplier of semiconductor solutions for Bluetooth wireless applications and was first to market with a Bluetooth-qualified single-chip radio. The company's Blutonium® line of products includes devices for mobile phones, PCs and PDAs, as well as application-specific chips for cellular phones and wireless mouse and keyboard applications. Over the past year, WIDCOMM's software has been ported, integrated and optimized for use with Broadcom's Bluetooth chips, allowing for straightforward integration of the two companies' product lines.
"We are excited to join forces with Broadcom, and believe our combined strengths will deliver on the promise of next generation Bluetooth products. As the market for Bluetooth devices continues to experience strong growth, we will create an excellent vehicle to increase the widespread adoption of WIDCOMM's stack in the Bluetooth industry," said Bob Hunsberger, President and CEO of WIDCOMM. "We see a great opportunity to use our software in other Broadcom-based system solutions for future wireless products, such as smart phones, consumer devices, broadband gateways and digital set-top boxes."
Over the past three years WIDCOMM has also performed overall system level integration services for most of its customers, including the leading PC and PDA OEMs, as well as leading mobile phone manufacturers. This invaluable integration expertise and WIDCOMM's extensive industry experience will enhance Broadcom's ability to rapidly integrate its products into customer platforms, and achieve the quickest time to market.
"WIDCOMM has been a key contributor in the development of the award- winning diNovo™ Media Desktop™, the MX™900 Bluetooth® Optical Mouse, as well as other innovative Bluetooth products from Logitech," said David Henry, Senior Vice President of Logitech's Control Devices Business Unit. "Bluetooth is a strategic technology for Logitech, enabling wireless freedom as well as unique integration of mobile products with the PC. This acquisition opens new and exciting opportunities for Broadcom while allowing us to continue our use of WIDCOMM's software in current and future products."
In connection with the acquisition, Broadcom will pay a total of approximately $49.0 million in the form of shares of its Class A common stock issued or reserved for future issuance (with the number of shares to be based on the average NASDAQ National Market closing price for a specified period prior to the closing) in exchange for all outstanding shares of WIDCOMM's capital stock and other rights of WIDCOMM. Assuming an applicable average price of $40 per share, Broadcom would issue or reserve for issuance about 1.23 million shares of its Class A common stock in connection with the acquisition. Up to approximately $3.0 million of the acquisition price may be paid in cash. A portion of the total consideration paid will be subject to escrow pursuant to the terms of the acquisition agreement. The merger transaction is expected to close in Broadcom's current fiscal quarter, which ends June 30. The boards of directors of both companies have approved the merger, which awaits approval by WIDCOMM's shareholders and the satisfaction of regulatory requirements and other customary closing conditions. The transaction will not draw upon the S-3 or S-4 shelf registration statements that Broadcom filed with the Securities and Exchange Commission in February 2004. At closing, Broadcom may record a one-time charge for purchased in-process research and development expenses related to the acquisition. The amount of that charge, if any, has not yet been determined.
Founded in 1998 in San Diego, WIDCOMM is a leading global provider of Bluetooth software, systems and turnkey designs. WIDCOMM software enables wireless communications technology in the fields of automotive, computing, consumer electronics, semiconductor and telecommunications. WIDCOMM currently provides complete Windows® based Bluetooth software to the world's leading PC and PDA OEMs, as well as embedded Bluetooth software to the world's largest semiconductor and consumer device manufacturers. For more information, please visit www.widcomm.com.
Broadcom Corporation is a leading provider of highly integrated semiconductor solutions that enable broadband communications and networking of voice, video and data services. We design, develop and supply complete system-on-a-chip (SoC) solutions incorporating digital, analog and radio frequency (RF) technologies, as well as related hardware and software system-level applications. Our diverse product portfolio addresses every major broadband communications market and includes solutions for digital cable and satellite set-top boxes; high definition television (HDTV); cable and DSL modems and residential gateways; high-speed transmission and switching for local, metropolitan, wide area and storage networking; home and wireless networking; cellular and terrestrial wireless communications; Voice over Internet Protocol (VoIP) gateway and telephony systems; broadband network and security processors; and SystemI/O™ server solutions. These technologies and products support our core mission: Connecting everything®.
Broadcom is headquartered in Irvine, Calif., and may be contacted at 1-949-450-8700 or at www.broadcom.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
All statements included or incorporated by reference in this release, other than statements or characterizations of historical fact, are forward- looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
Important factors that may cause such a difference for Broadcom in connection with the acquisition of WIDCOMM include, but are not limited to, the risks inherent in acquisitions of technologies and businesses, including the timing and successful completion of technology and product development through volume production, integration issues, costs and unanticipated expenditures, changing relationships with customers, suppliers and strategic partners, potential contractual, intellectual property or employment issues, accounting treatment and charges, and the risk that anticipated benefits of the acquisition may not be realized; general economic and political conditions and specific conditions in the markets we address, including the volatility in the technology sector and semiconductor industry, trends in the broadband communications markets in various geographic regions, and possible disruption in commercial activities related to terrorist activity or armed conflict in the United States and other locations; the rate at which our present and future customers and end-users adopt Broadcom's and WIDCOMM's technologies and products in the markets for Bluetooth wireless applications; delays in the adoption and acceptance of industry standards in those markets; our ability to scale our operations in response to increases in demand for our products and services; competitive pressures and other factors such as the qualification, availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; the availability and pricing of third party semiconductor foundry and assembly capacity and raw materials; fluctuations in the manufacturing yields of our third party semiconductor foundries and other problems or delays in the fabrication, assembly, testing or delivery of our products; our ability to retain and hire key executives, technical personnel and other employees in the numbers, with the capabilities, and at the compensation levels needed to implement our business and product plans; the risks of producing products with new suppliers and at new fabrication and assembly facilities; the timing, rescheduling or cancellation of significant customer orders and our ability, as well as the ability of our customers, to manage inventory; the loss of a key customer; our ability to specify, develop or acquire, complete, introduce, market and transition to volume production new products and technologies in a timely manner; the timing of customer-industry qualification and certification of our products and the risks of non-qualification or non-certification; the volume of our product sales and pricing concessions on volume sales; the effects of new and emerging technologies; changes in our product or customer mix; intellectual property disputes and customer indemnification claims and other types of litigation risk; problems or delays that we may face in shifting our products to smaller geometry process technologies and in achieving higher levels of design integration; the quality of our products and any remediation costs; the effectiveness of our expense and product cost control and reduction efforts; the risks and uncertainties associated with our international operations, particularly in light of recent events; the effects of natural disasters, public health emergencies, international conflicts and other events beyond our control; the level of orders received that can be shipped in a fiscal quarter; and other factors.
Our Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss the foregoing risks as well as other important risk factors that could contribute to such differences or otherwise affect our business, results of operations and financial condition. The forward-looking statements in this release speak only as of this date. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.
Broadcom®, the pulse logo, Connecting everything®, Blutonium®, and SystemI/O™ are trademarks of Broadcom Corporation and/or its affiliates in the United States and certain other countries. Bluetooth® is a trademark of the Bluetooth SIG. WIDCOMM® is a trademark of WIDCOMM, Inc. diNovo™ Media Desktop™, and MX™ are trademarks of Logitech International. Windows® is a trademark of Microsoft Corporation. All other trademarks or trade names mentioned are the property of their respective owner.
Broadcom Trade Press Contact Laura Brandlin Director, Marketing Communications 949-926-5108 firstname.lastname@example.org Broadcom Business Press Contact Bill Blanning Sr. Director, Corporate Communications 949-926-5555 email@example.com Broadcom Investor Relations Contact T. Peter Andrew Sr. Director, Investor Relations 949-926-5663 firstname.lastname@example.org* Source: In-Stat/MDR, 2003.
SOURCE Broadcom Corporation -0- 04/19/2004 /CONTACT: trade press, Laura Brandlin, Director, Marketing Communications, +1-949-926-5108, email@example.com, or business press, Bill Blanning, Sr. Director, Corporate Communications, +1-949-926-5555, firstname.lastname@example.org, or investor relations, T. Peter Andrew, Sr. Director, Investor Relations, +1-949-926-5663, email@example.com, all of Broadcom Corporation / /Web site: http://www.widcomm.com http://www.broadcom.com/ (BRCM) CO: Broadcom Corporation; WIDCOMM, Inc. ST: California IN: CPR TLS NET STW SEM RAD MLM ITE SU: TNM SK -- LAM073 -- 4693 04/19/2004 08:02 EDT http://www.prnewswire.com