IRVINE, Calif., Nov. 22, 2010 /PRNewswire-FirstCall/ -- 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 Gigle Networks Inc., a privately-held company that develops system-on-a-chip (SoC) solutions for home networking over power lines.
When combined with Broadcom's world-class portfolio of wired and wireless solutions for the home, Gigle Networks' technology will widen the breadth of Broadcom's intellectual property and enable the design of more highly integrated SoCs that allow whole-home network coverage in a wide variety of global deployment scenarios. By adding powerline to its technology portfolio, Broadcom will be able to provide additional functionality to its customers in broadband home segments including set-top box, broadband carrier access and wireless router.
"The worldwide market has demanded technologies for powerline, coax and wireless networking using standards such as Wi-Fi, MoCA, HomePlug AV, IEEE 1901 and G.hn to allow the streaming of multiple high definition and 3D video streams," said Jason Blackwell, Digital Home Practice Director, ABI Research. "With electric outlets readily available around the home, more consumers are seeing the benefits of powerline, and service providers' increased push toward gateways and IPTV is expected to help increase the market at a 32 percent compound annual growth rate from 2010 to 2015."
Powerline networking uses existing electrical wiring to create an in-home network, enabling a cost-effective and efficient method to connect multiple devices and distribute digital content throughout the home. Gigle Networks' powerline networking technology is HomePlug AV certified and is designed to be compliant with the IEEE 1901 standard for high speed powerline communications. Gigle Networks is a member of the HomePlug® Powerline Alliance, an organization responsible for establishing standards and testing devices for compliance and interoperability. HomePlug AV and IEEE 1901 solutions complement other networking technologies for the connected home. For example, a combined home network of powerline networking, MoCA and Wi-Fi enhances advanced applications like high definition video streaming, enabling a whole-home connected environment. The acquisition will
also accelerate Broadcom's time to market for G.hn, a new draft specification for existing-wire home networking, developed under the International Telecommunication Union.
"Broadcom's broadband home platforms span a wide range of segments including set-top box, broadband carrier access and wireless router. With the addition of Gigle Networks' powerline technology, and our proven ability and extensive experience in supporting the multiple methods to connect devices including Ethernet, Wi-Fi, MoCA and DLNA, Broadcom is able to offer service providers and device manufacturers a variety of ways to deploy a whole-home connected environment," said Dan Marotta, Executive Vice President & General Manager of Broadcom's Broadband Communications Group.
"Broadcom is a well known leader in designing highly integrated home networking SoCs to enhance the consumer infotainment experience in the home," said Juan Carlos Riveiro, President and Chief Executive Officer, Gigle Networks. "As the segment evolves and new standards emerge, such as G.hn, technologies from both companies can be combined to enable higher performance, more integrated and lower-cost solutions for the connected home."
In connection with the acquisition, Broadcom expects to pay approximately $75 million to acquire all of the outstanding shares of capital stock and other rights of Gigle Networks. The purchase price will be paid in cash, except that holders of unvested employee stock options will receive Broadcom equity awards. Additional consideration of up to $8 million in cash will be reserved for future payment to the former holders of Gigle Networks capital stock and other rights upon satisfaction of certain performance goals. A portion of the cash consideration payable to the stockholders will be placed into escrow to cover indemnity obligations. Excluding any purchase accounting related
adjustments or fair value measurements that are not estimable at this time, Broadcom expects the acquisition of Gigle Networks to be dilutive by approximately $0.01 per share in 2011. The shareholders of Gigle Networks and the boards of directors of the two companies have approved the acquisition. The transaction is expected to close in the fourth quarter of 2010 and remains subject to customary closing conditions.
About Gigle Networks
Gigle Networks provides solutions for multimedia home networking that can extend wired and wireless Ethernet everywhere in the home — without the need for new wires. Targeted for applications such as Internet Protocol Television (IPTV), broadband TV (BBTV), video on demand (VoD), and voice over IP (VoIP), Gigle Networks' products offer superior performance, coverage and Quality of Service (QoS), and are designed to be easily integrated into consumer electronics and networked products. Gigle Networks is a strong supporter of open standards, a board member of the HomePlug® Powerline Alliance, and an active participant in the IEEE 1901 standards body and the ITU-T G.hn wireline standardization initiative.
Broadcom Corporation is a major 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 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®.
Broadcom, one of the world's largest fabless communications semiconductor companies, with 2009 revenue of $4.49 billion, and holds more than 4,500 U.S. and 1,900 foreign patents, and has more than 7,800 additional pending patent applications, and one of the broadest intellectual property portfolios addressing both wired and wireless transmission of voice, video, data and multimedia.
A FORTUNE 500® company, Broadcom is headquartered in Irvine, Calif., and has offices and research facilities in North America, Asia and Europe. Broadcom may be contacted at +1.949.926.5000 or at www.broadcom.com.
Cautions regarding Forward-Looking Statements:
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 and business, 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," "ongoing," similar expressions, and variations or negatives of these words. Examples of such forward-looking statements include, but are not limited to, statements regarding references to the anticipated benefits to
Broadcom related to its acquisition of Gigle Networks, including enabling the design of connected home SoCs with powerline networking while also accelerating the time-to-market for G.hn, the impact of the acquisition on Broadcom's earnings per share, the expected purchase price and the expected completion and timing of the transaction. 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 risk factors that may cause such a difference for Broadcom in connection with the acquisition of Gigle Networks include, but are not limited to:
- the ability of the parties to successfully and timely consummate the transactions contemplated by the merger agreement and related transaction documents,
- unexpected variations in market growth and demand for powerline networking technologies,
- 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,
- the risk that anticipated benefits of the acquisition may not be realized, and
- charges resulting from purchase accounting adjustments or fair value measurements.
Additional factors that may cause Broadcom's actual results to differ materially from those expressed in forward-looking statements include, but are not limited to the list that can be found at http://www.broadcom.com/press/additional_risk_factors/Q42010.php.
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, except as required by law.
Broadcom ®, the pulse logo, Connecting everything® and the Connecting everything logo are among the trademarks of Broadcom Corporation and/or its affiliates in the United States, certain other countries and/or the EU. Any other trademarks or trade names mentioned are the property of their respective owners.
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SOURCE Broadcom Corporation; BRCM Corporate