IRVINE, Calif. and ANDOVER, Mass., March 2, 2006 -- Broadcom Corporation (Nasdaq: BRCM), a global leader in semiconductors for wired and wireless communications, today announced that it has completed the acquisition of Sandburst Corporation, a privately-held fabless semiconductor company specializing in the design and development of scalable packet switching and routing systems-on-a-chip (SoCs) that are deployed in enterprise core and metropolitan Ethernet networks.
On January 23 Broadcom announced a definitive agreement to acquire Sandburst, noting that the combination of Broadcom's industry-leading StrataXGS(R) III Ethernet Switches and Sandburst's Metropolitan Ethernet SoCs will allow Broadcom to offer a complete end-to-end Ethernet switching portfolio for the SOHO/SMB, enterprise, enterprise core and metro Ethernet markets.
In connection with the acquisition, Broadcom paid total consideration of approximately $77 million. Broadcom paid $72 million in cash in exchange for all outstanding shares of capital stock and vested stock options of Sandburst. A portion of the cash consideration was placed into escrow pursuant to the terms of the acquisition agreement. Broadcom also assumed all unvested employee stock options of Sandburst, which will entitle the holders to receive, upon vesting, up to approximately 110,000 shares of Broadcom Class A common stock, having a total value of approximately $5 million based upon the terms of the acquisition agreement. Broadcom may record a one-time charge for purchased in-process research and development expenses related to the acquisition in the first quarter of 2006. The amount of that charge, if any, has not yet been determined.
Broadcom Corporation is a global leader in semiconductors for wired and wireless communications. Our products enable the delivery of voice, video, data and multimedia to and throughout the home, the office and the mobile environment. Broadcom provides 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(R).
Broadcom, one of the world's largest fabless semiconductor companies with annual revenue of more than $2.5 billion, is headquartered in Irvine, Calif., and has offices and research facilities in North America, Asia and Europe. Broadcom 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 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. 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 Sandburst Corporation 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, including seasonality in sales of consumer products into which our products are incorporated, 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 Sandburst's technologies and products in the markets for high-speed networking applications; delays in the adoption and acceptance of industry standards in those markets; our ability to scale our operations in response to changes in demand for our existing products and services or demand for new products requested by our customers; intellectual property disputes and customer indemnification claims and other types of litigation risk; the gain or loss of a key customer, design win or order; our dependence on a few significant customers for a substantial portion of our revenue; the timing, rescheduling or cancellation of significant customer orders and our ability, as well as the ability of our customers, to manage inventory; our ability to specify, develop or acquire, complete, introduce, market and transition to volume production new products and technologies in a cost-effective and timely manner; the rate at which our present and future customers and end-users adopt Broadcom's technologies and products in our target markets; delays in the adoption and acceptance of industry standards in those markets; our ability to retain, recruit and hire key executives, technical personnel and other employees in the positions and numbers, with the experience and capabilities, and at the compensation levels needed to implement our business and product plans; the effectiveness of our expense and product cost control and reduction efforts; our ability to timely and accurately predict market requirements and evolving industry standards and to identify opportunities in new markets; the quality of our products and any remediation costs; 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, assembly and test capacity and raw materials; 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 timing of customer-industry qualification and certification of our products and the risks of non-qualification or non-certification; changes in our product or customer mix; the volume of our product sales and pricing concessions on volume sales; 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 and test facilities; 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(R), the pulse logo, Connecting everything(R), the Connecting everything logo, Sandburst(R) and StrataXGS(R) 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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