Semiconductor giant Broadcom expects to pay around $195 million in cash for BroadLight, minus a portion of the purchase price attributable to certain employee stock options.
Israel-based BroadLight makes chips used in fiber optic networks which go on to carry high-speed Internet and television services.
The acquisition is part of Broadcom's efforts to expand its broadband access portfolio and bring next-generation fiber access to homes and businesses.
If BroadLight meets certain goals and targets, a performance based payment of $10 million could be awarded to the company, easing the deal. The deal is set to close in the second quarter with closing conditions, Broadcom said.
The deal will be roughly neutral to 2012 earnings per share. It will also be Broadcom's tenth technology oriented acquisition in Israel, making the Middle-Eastern country one of the powerhouses for chips and research and development.
Broadcom's fourth-quarter results in January showed revenue falling by 6.4 percent, below expectations of analysts. It said it would do better in the first quarter, helped along by supplying components to Samsung and Apple in their line of smartphones and tablets.
The company had previously warned that demand across its business segments could be hurt amid difficult economic times and an industry ’slowdown’.
The need for increased bandwidth for next-generation Internet services, like high-definition television content and high-speed broadband are factors in keeping Broadcom ahead of the race.
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