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To: John McDonald who wrote (5804)	8/12/1999 12:37:00 AM
From: DJBEINO	Respond to of 9582

Broadcom to purchase soft-modem specialist AltoCom By Mark LaPedus Electronic Buyers' News (08/11/99, 02:45:29 PM EDT) In its fifth acquisition since the beginning of this year, high-flying Broadcom Corp. has signed a definitive agreement to buy software-modem/fax specialist AltoCom Inc. of Mountain View, Calif., for about $170 million in stock. The move would propel Irvine, Calif.-based Broadcom into the emerging software-modem business, a promising area with technology that the company said is more viable and less expensive than traditional chip-level analog-modem products from the likes of Conexant, Lucent, and Texas Instruments. Software-modems use ASIC-like devices to enable a PC to obtain a modem connection in software, saving system component costs. To date, PC-TEL Inc. has proved to be the pioneer and leader in this market. Critics charge that so-called soft-modems can tax the host processor as it executes other operations in the system. Nevertheless, the level of interest the technology has generated has prompted companies like Conexant and Motorola to field software-modem devices of their own. Broadcom's latest acquisition is widely viewed as a concession to the growing popularity-and potential-of software-modem products. AltoCom, a privately-held company, sells software data/fax modem solutions for general-purpose embedded processors, CPUs, and DSPs. As it is assimilated into Broadcom's corporate structure, AltoCom's software-modem technology will be paired with the home-networking know-how of Epigram Inc., a wholly-owned subsidiary of Broadcom. Epigram makes a Ethernet-like LAN chips that link two or more PCs in the home over a 10-Mbit/s network. AltoCom's software-modem products enable an integrated 56-Kbit/s, V.90-compliant link between the home and central office. "The addition of AltoCom to the Broadcom family reinforces our commitment to delivering integrated Internet access functionality," said Henry T. Nicholas III, president and chief executive of Broadcom, in a statement. Under terms of the AltoCom sale, Broadcom will issue approximately 1.62 million shares of its Class B Common Stock in exchange for all shares of AltoCom Preferred and Common Stock, including shares issuable upon exercise of employee stock options and other rights. The deal is Broadcom's fifth acquisition this year. In January, the company bought Maverick Networks Inc., a developer of Layer 3 switching chips, for $104 million, followed in April by the $316 million purchase of home-networking chip maker Epigram. Last month, Broadcom picked up Armedia Inc., a small developer of digital-video decoder ICs, with operations in Bangalore, India, for $67 million. Most recently, Broadcom acquired HotHaus Technologies Inc., a five-year-old supplier of software for voice-over-IP applications, for $280 million in stock. The latest merger is expected to close within 60 days and will be accounted for as a pooling of interests. ebnews.com