Broadband chipmaker Broadcom said it will buy Silicon Spice for $1.19bn in stock in a continuation of its spending spree.
Silicon Spice makes semiconductor technology, software and development tools for high density voice, fax and data packet transport over wide area networks. It sells to manufacturers of communications equipment such as carrier gateways, access gateways and remote access concentrators that connect traditional telephone networks to packet-based networks like the internet.
Under the terms of the deal, Broadcom will issue about five million of its shares in exchange for all outstanding shares of Silicon Spice stock. The deal, which has the approval of both boards, is expected to be closed within 60 days.
Broadcom said it expects to record a one-time write-off for purchased in-process research and development expenses related to the deal in its third quarter ending 30 September.
Henry Nicholas, president and chief executive at Broadcom, said: "The acquisition and its technology leverage the installed base of our xChange Voice over Internet Protocol software which is already deployed in many carrier access systems and IP gateways throughout the world."
The Silicon Spice technology aims to allow carriers to deliver voice and data services simultaneously over a unified data network at a higher density than has been previously possible. The company said it has invented a new signal processing architecture that surpasses the density and power dissipation of existing voice over packet network solutions.
Will Strauss, an analyst for the digital signal processing industry, and president of Forward Concepts, said the acquisition will highlight a new class of device which his company defines as an access communications processor (ACP).
"We believe that ACPs will have an even greater impact on the communications market than network processors have had," he said.
This is Broadcom's twelfth acquisition since June 1999. Last month, the company agreed to buy Altima Communications for $533m in stock to gain greater access to small and medium-sized businesses. Altima makes networking products for switches, routers and internet applications.
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