Broadcom Corporation (NASDAQ: BRCM), a global innovation leader in semiconductor solutions for wired and wireless communications, and QLogic Corporation (NASDAQ: QLGC), a leading supplier of high performance network infrastructure solutions, today announced a definitive agreement under which QLogic will acquire certain 10/40/100Gb Ethernet controller-related assets and non-exclusive licenses to certain intellectual property relating primarily to Broadcom's programmable NetXtreme®…
Broadcom Corporation (NASDAQ: BRCM), a global innovation leader in semiconductor solutions for wired and wireless communications, and QLogic Corporation (NASDAQ: QLGC), a leading supplier of high performance network infrastructure solutions, today announced a definitive agreement under which QLogic will acquire certain 10/40/100Gb Ethernet controller-related assets and non-exclusive licenses to certain intellectual property relating primarily to Broadcom's programmable NetXtreme® II Ethernet controller family. Total deal consideration is approximately $147 million in cash. In connection with the transaction, Broadcom and QLogic will enter into a long-term supply agreement whereby Broadcom will become ASIC supplier to QLogic in support of the NetXtreme II product line.
"This transaction is a win-win for our customers. Broadcom is focusing internal Ethernet controller efforts on strengthening its end-to-end data center platform while establishing a long-term ASIC supply relationship with QLogic in support of NetXtreme II Ethernet controllers," said Rajiv Ramaswami, Executive Vice President and General Manager of Broadcom's Infrastructure and Networking Group. "This transaction enables customers to be served without disruption by a leading partner, allows Broadcom to provide a broader solution portfolio overall and creates value for our shareholders."
"We are pleased to enter into this partnership with Broadcom," said Prasad Rampalli, President and Chief Executive Officer of QLogic. "QLogic gains world-class technology, an immediate presence serving enterprise customer Ethernet controller needs and an important long-term partnership to deliver end-to-end solutions. Going forward, this acquisition will form the foundation of our Ethernet controller business and accelerates our time-to-market with leading-edge technology."
Concurrent with the closing, it is expected QLogic will license certain Broadcom patents under a non-exclusive patent license agreement that will cover QLogic's Fibre Channel products in exchange for a license fee of $62 million.
The transaction has been approved by the boards of directors of Broadcom and QLogic and is subject to customary closing conditions. The transaction is expected to close in the first quarter of calendar 2014.
Excluding potential one-time gains related to this asset sale, Broadcom expects the transaction to be slightly accretive to earnings per share in 2014.
QLogic expects this transaction to be immediately accretive to revenue and non-GAAP earnings per share.
QLogic to Host Investors' Conference Call
QLogic will host a conference call for analysts and investors today at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time) to discuss the transaction. The call and materials to be presented will be webcast live via the Internet at http://ir.qlogic.com. Phone access to participate in the conference call is available at (888) 713-4487, passcode 6366233.
The transaction information that QLogic intends to discuss during the conference call will be available on QLogic's website at http://ir.qlogic.com for twelve months following the conference call. A replay of the conference call will be available via webcast at http://ir.qlogic.com for twelve months.
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