Broadcom Acquires Israeli Wireless Chipmaker
By Simons, Andrew Orange County Business Journal
Date: Jul 12-Jul 18, 2004
Count another acquisition for Broadcom Corp.
allbusiness.com
This time the Irvine chipmaker bought Israel's M-Stream Inc. for $8.7 million in cash and 27,000 shares of Broadcom stock-making the deal worth about $10 million.
Broadcom quietly made the buy in April, disclosing it in a quarterly filing with the Securities & Exchange Commission.
M-Stream makes chips for improved reception of voice, video and music on wireless phones.
The buy is the company's sixth deal this year. Broadcom kicked off 2004 with a $16.5 million buy of Nashua, N.H.-based RAIDCore Inc., a maker of software
Then Broadcom made an $18 million buy of storage technology patents from Austin, Texas-based Cirrus Logic Inc. The patents cover the way data are stored and data are stored and retrieved from disk drives.
Last month Broadcom said it plans to buy San Diego-based wireless phone chip designer Zyray Wireless Inc. for about $98 million in stock.
In May, Broadcom acquired Wincomm Inc., a provider of software for Bluetooth wireless products, for $49 million in cash.
A month earlier, Broadcom acquired Sand Video Inc. for $85 million in cash and shares.
"As long as they are doing well, I think they will continue to make acquisitions," said Arnab Chanda, an analyst with Lehman Brothers Inc. "They're going to look in software, digital video, wireless. Still, they'll make acquisitions selectively."
Broadcom is doing well. The company's stock is up 30% for the year with a market value of $12 billion last week. After bad news at Emulex Corp. and Conexant Systems Inc. in recent weeks, investors are awaiting Broadcom's results, due later this month.
Chief Executive Lanny Ross told investors about his so-called unofficial revenue target in April. That target is for each of Broadcom's four product groups to post annualized sales of $1 billion by the end of next year.
Broadcom's 2003 revenue came in at $1.6 billion.
Acquisitions could help Broadcom meet Ross' goal.
The company's rapid growth was aided by 32 acquisitions since 1999. After a torrid buying spurt that netted 24 companies for Broadcom between 1999 and 2001, the company slowed its buying until this year.
Broadcom was no stranger to M-Stream. Broadcom, along with San Diego-based Applied Materials Inc., were initial investors in M-Stream.
In the past year, Broadcom has sought to increase its patent portfolio. Last year Ross said the company might go so far as to acquire a company "equal in size or slightly smaller" than itself.
For Broadcom, the idea was more of a defensive one than an offensive one.
With about $1 billion in yearly sales and growing, Broadcom has drawn attention-and fire-from heavyweights such as Intel Corp. and Texas Instruments Inc. The company's growth led to lawsuits from rivals who are looking to fend off competitive challenges.
The biggest legal salvos have come from Intel and Microtune Inc., which sued Broadcom for patent infringement. Broadcom countersued with its own infringement charges.
The company seems to have opted for a more aggressive use of its patents in a recent lawsuit.
The patents Broadcom bought from Cirrus Logic were the basis for a new legal battle Broadcom initiated with Allentown, Pa.-based Agere Systems Inc. earlier this year. |
