Acquisition Enables Broadcom to Provide a Unique and Complete Set of RAID Solutions That Efficiently and Reliably Manage Storage Resources Within a Server
IRVINE, Calif., Feb. 2 /PRNewswire-FirstCall/ -- Broadcom Corporation (Nasdaq: BRCM), a leading provider of silicon solutions enabling broadband communications, today announced that it has acquired RAIDCore, Inc., a Nashua, New Hampshire-based start-up company focused on the development of RAID and virtualization software. RAIDCore currently provides a complete enterprise- class RAID software stack targeted at high volume single and dual processor servers. Employing RAIDCore's proprietary Fulcrum Architecture(TM), the software is operating system, I/O bus and hardware independent and can be used with existing and future server RAID solutions, whether based on SATA (Serial Advanced Technology Attachment) RAID or SAS (Serial Attached SCSI) RAID.
The acquisition of RAIDCore and its full-featured, enterprise-class RAID software stack will enable Broadcom to offer a unique and complete set of RAID solutions to the server storage market. With the emergence of low cost, high capacity SATA drives, and the constant need to increase storage within servers, Broadcom has identified an opportunity to efficiently and reliably manage storage resources within a server through the combination of Broadcom(R) silicon and RAIDCore(TM) software. The initial products resulting from the acquisition will focus on highly integrated RAID-on-chip (ROC) and RAID-on-motherboard (ROM) solutions for entry-level and mid-range server applications.
RAID (or Redundant Array of Inexpensive Disks) is a technology in which data is stored in a distributed manner across multiple disk drives to achieve redundancy and improved data transfer rates. RAID can also provide real-time data recovery, with uninterrupted access, when a hard drive fails, as well as increased system uptime and 24/7 network availability. With the continued increase in local storage capacity on servers, the need to effectively manage these storage resources increases, requiring customers to pursue complete RAID storage solutions.
"The volume server market is moving to RAID-on-motherboard and RAID-on- chip solutions," said Thomas Lagatta, Broadcom's Group Vice President, Enterprise Computing. "The acquisition of RAIDCore will allow us to offer our server OEM customers a complete and differentiated storage solution based on our existing storage hardware products and this new RAID software stack."
"With its broad product portfolio and market access, Broadcom is the ideal complement for RAIDCore's growing reach into the storage segment," said Tom Marmen, CEO of RAIDCore. "As enterprise-class RAID requirements expand to encompass the SMB market through the Fortune 500, the synergies derived by the combination of RAIDCore's Fulcrum Architecture and Broadcom's storage controller products make this a great opportunity to offer an impressive product line to our OEM customers."
In connection with the acquisition of RAIDCore, Broadcom is incurring cash acquisition costs and future compensation expense in a total amount of up to $16.5 million, of which approximately $10 million will be paid in the company's first fiscal quarter, ending March 31. Broadcom expects to record a one-time charge for purchased in-process research and development expenses related to the acquisition in the first fiscal quarter. The amount of that charge has not yet been determined. This transaction will not cause Broadcom to draw on either the S-3 or S-4 shelf registrations that were announced on January 27, 2004.
Broadcom Corporation is a leading provider of highly integrated silicon solutions that enable broadband communications and networking of voice, video and data services. Using proprietary technologies and advanced design methodologies, Broadcom designs, develops and supplies complete system-on-a- chip solutions and related hardware and software applications for every major broadband communications market. Our diverse product portfolio includes solutions for digital cable and satellite set-top boxes; 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 processors; and SystemI/O(TM)server solutions. These technologies and products support our core mission: Connecting everything(R).
Broadcom is headquartered in Irvine, Calif., and may be contacted at 1-949-450-8700 or at www.broadcom.com .
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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 RAIDCore 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 risks that the anticipated benefits of the acquisition are not realized; general economic and political conditions and specific conditions in the markets we address, including the continuing significant economic slowdown and 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 technologies and products in the markets for enterprise storage networking applications; delays in the adoption and acceptance of industry standards in those markets; 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; 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 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; 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 availability 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.
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