Broadcom to Acquire Gigle Networks
Broadcom (NASDAQ:BRCM) is set to acquire Gigle Networks, a privately-held company that develops system-on-a-chip (SoC) solutions for home networking over power lines, in a deal estimated to be worth $75 million.
The addition of Gigle’s powerline networking technology will extend Broadcom’s connected home portfolio and enable the design of more highly integrated SoCs that allow whole-home network coverage in a wide variety of global deployment scenarios. By adding powerline to its technology portfolio, Broadcom will be able to provide additional functionality to its customers in broadband home segments including set-top box, broadband carrier access and wireless router.
Powerline networking uses existing electrical wiring to create an in-home network, enabling a cost-effective method to connect multiple devices and distribute digital content throughout the home. Gigle Networks’ powerline networking technology is HomePlug AV certified and is designed to be compliant with the IEEE 1901 standard for high speed powerline communications. Gigle Networks is a member of the HomePlugÂ Powerline Alliance, an organization responsible for establishing standards and testing devices for compliance and interoperability.
“Broadcom’s broadband home platforms span a wide range of segments including set-top box, broadband carrier access and wireless router. With the addition of Gigle Networks’ powerline technology, and our proven ability and extensive experience in supporting the multiple methods to connect devices including Ethernet, Wi-Fi, MoCA and DLNA, Broadcom is able to offer service providers and device manufacturers a variety of ways to deploy a whole-home connected environment,” said Dan Marotta, executive VP & GM of Broadcom’s Broadband Communications Group.
The purchase price will be paid in cash, except that holders of unvested employee stock options will receive Broadcom equity awards. Additional consideration of up to $8 million in cash will be reserved for future payment to the former holders of Gigle Networks capital stock and other rights upon satisfaction of certain performance goals. A portion of the cash consideration payable to the stockholders will be placed into escrow to cover indemnity obligations. The shareholders of Gigle Networks and the boards of directors of the two companies have approved the acquisition. The transaction is expected to close in the fourth quarter of 2010 and remains subject to customary closing conditions.
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