bloomberg's take on the acquisition.
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Vitesse Semiconductor to Buy XaQti for $65 Mln Stock
Camarillo, California, May 24 (Bloomberg) -- Vitesse Semiconductor Corp., which makes high-speed telecommunications chips, agreed to buy XaQti Corp. for $65 million in stock to sell a wider variety of Internet chips and processors.
XaQti's processors, which help drive so-called gigabit Ethernet and other data networks, work alongside Vitesse's chips in equipment that directs Internet traffic, Needham & Co. analyst David Wong said. Buying XaQti allows Camarillo, California-based Vitesse to sell a broader range of products to its customers, which include Lucent Technologies Inc. ''Vitesse is beefing up its datacom division. This is very complementary,'' said Wong, who rates Vitesse a strong buy. Santa Clara, California-based XaQti's products are mostly in development and the company has almost no revenue, Wong said.
BancBoston Robertson Stephens analyst Arun Veerappan said the combination makes Vitesse more of a one-stop shop for chips and processors used by network-systems manufacturers.
Vitesse's non-silicon chips are used in office networks, or local-area networks, Wong said.
The sale is expected to close in July, and will not impact earnings.
XaQti was founded four years ago and employs 35. Vitesse gained 1 3/8 to 52 5/8. Its shares have almost tripled since hitting a 52-week low of 18 1/6 on Oct. 5.
The company's shares fell 12 percent April 9 after it said changes in Lucent's contracting procedures would make it difficult to predict earnings.
Vitesse was raised to ''strong buy'' from ''buy'' today by analyst Kurt Lanzavecchia at CE Unterberg Towbin. |
