Broadcom, a provider of semiconductors for wired and wireless communications, has signed a definitive agreement to acquire Teknovus, a supplier of ethernet passive optical network chipsets and software.
Broadcom said it expects to pay approximately $123m to acquire all of the outstanding shares of capital stock and other rights of Teknovus. The purchase price will be paid in cash, with a portion placed into escrow pursuant to the terms of the acquisition agreement.
Excluding any purchase accounting related adjustments and fair value measurements, the company expects that the acquisition of Teknovus will be approximately neutral to earnings per share in 2010. The boards of the two companies have approved the merger.
Martin Lund, senior vice president and general manager of network switching line of business at Broadcom, said: Teknovus has a strong product and has established a solid reputation with our existing customers. Today Broadcom has switching, DSL, GPON, and cable solutions in the service provider segment that span from the access to the core of the network.
“Teknovus’ products will add a key element to our existing service provider offering that will enable us to better serve our customers in this segment.
The closing, which is expected to occur in the first or second quarter of the year, remains subject to the satisfaction of regulatory requirements and other customary closing conditions.