Another great acquisition by BRCM, looking ahead to the future, with an analyst's comments below. Looks like the VoIP segment is really heating up. Anyone see CLRN in the past several days since it's IPO. As an aside, this is the second merger BRCM has announced on a Sunday. I guess those guys don't sleep late ;)
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Broadcom to Buy HotHaus Technologies for $280 Mln in Stock
Bloomberg News
July 18, 1999, 12:03 p.m. PT
Broadcom to Buy HotHaus Technologies for $280 Mln in Stock
Irvine, California, July 18 (Bloomberg) -- Broadcom Corp., a
leading maker of high-speed communications semiconductors, agreed
to buy HotHaus Technologies Inc. for $280 million in stock,
enhancing its position in the emerging market for phone calls
using Internet technology.
Broadcom will issue 2 million of its Class B shares for
HotHaus, a closely held developer of software that enables
communications over broadband networks. The transaction is
expected to close in two months and begin contributing to
Broadcom's earnings within 18 months.
Irvine, California-based Broadcom said it will combine
HotHaus software with its semiconductor designs to provide lower-
cost transmission of voice, data and video over broadband
networks, including cable-television systems. Cable operators,
including AT&T Corp., are beginning to offer phone service over
their cable lines in the hope of getting a piece of the
$100 billion U.S. local phone market.
''It enhances Broadcom's position,'' said Patti Reali, a
DataQuest Inc. analyst. ''This is a long-term move to prepare for
what is going to happen.''
Vancouver, British Columbia-based HotHaus specializes in so-
called ''digital signal processing'' software used in Internet
appliances, servers and phone and cable modems, many of which use
Broadcom chips. HotHaus software handles such tasks as
compressing voice signals, dividing those signals into packets
and allowing the packets to pass over the Internet.
Broadband hopes to take some of the software functions and
include them into chips to offer customers a complete, low-cost
system that will help speed deployment of Internet phone and
other broadband services. ''This is one of the most strategic
acquisitions in the history of the company,'' said Henry Nicholas
III, Broadcom president and chief executive.
Executive Staying
HotHaus's 70 employees will become part of Broadcom's cable
business unit, and Ross Mitchell, HotHaus president and CEO, will
remain with the company.
Broadcom will take an as-yet-announced charge in its fiscal
third quarter to cover acquisition-related expenses.
The acquisition is Broadcom's fourth this year, and like the
others uses stock to add closely held companies. Broadcom's stock
price has been among the best performers in the semiconductor
sector, rising 271 percent in the past 12 months. The earlier
purchases involved issuing 6.36 million shares worth roughly
$611.3 million when the transactions closed.
Broadcom, which 1 5/16 to 139 13/16, reports its earnings on
Wednesday. |
