I'm circumspect on CNXT/// -BRCM makes a Bluetooth Purchase...
June 13, 2000
Broadcom Agrees to Buy
Bluetooth Product Maker
A WSJ.COM News Roundup
IRVINE, Calif. -- Broadcom Corp. said Tuesday it has agreed to acquire Innovent Systems Inc., a hardware maker developing products for the Bluetooth wireless-technology standard, in exchange for three million newly-issued Class A Broadcom common shares.
Based on Software maker Broadcom's closing stock price on Monday of $146.69, the deal would be worth about $440.1 million. Broadcom has about 215.2 million shares outstanding.
In a statement Tuesday, Broadcom said it already owned about 13% of the El Segundo, Calif.-based hardware maker, and had invested in the company since its 1999 inception.
Bluetooth is a standard for short-range wireless connections among all sorts of electronic devices, from laptops and cellular phones to microwaves and blenders. The idea is to let these devices seamlessly transmit information to each other so that, say, a phone might ring when a computer has an e-mail or when a meal is ready in the oven.
The technology has already been backed by at least 1,600 electronics and communications companies including Motorola Inc., Telefon AB L.M. Ericsson, 3Com Corp., International Business Machines Corp.
On Monday, Motorola unveiled the first of several new products using Bluetooth technology, including a car kit for transferring calls from cellular phones to car phones, and a modem card for a personal computer to provide a wireless link for the exchange of information between PCs and handheld computers.
IBM has already announced plans to integrate Bluetooth into all of its product lines, while Toshiba Corp. plans to ship Bluetooth-equipped laptop computers.
Broadcom, based in Irvine, Calif., plans to combine its networking and broadband products with Innovent's radio frequency and Bluetooth products, in the hopes of gaining a significant stake in wireless markets. The two companies are jointly testing several products, including a wireless Internet browser that incorporates video and audio streaming across a Bluetooth link.
The acquisition is expected to close within 60 days. The boards of both companies approved it, but Innovent shareholders have yet to vote on it.
Broadcom also said it expects to record a write-off for purchased in-process research and development in the third quarter ending Sept. 30. The amount wasn't disclosed. For the third quarter ended Sept. 30, 1999, the company earned $27.2 million, or 23 cents a diluted share, on revenue of $138.4 million. The quarter included a $4.1 million merger-related charge. A First Call survey of 20 analysts put the company's third-quarter earnings at 21 cents a share. |
