Broadcom has moved to acquire NetLogic Microsystems in an effort to boost its communication and processing offerings.
The company has agreed to pay $3.7 billion for NetLogic, a move which will increase its existing product line with new products.
The acquisition will add knowledge-based processors, multi-core embedded processors and digital front-end processors to Broadcom’s existing product portfolio. NetLogic is also dabbling in 4G wireless technology, something which is of immense interest to Broadcom.
Broadcom, which makes communication chips for smartphones, GPS receivers and Wi-Fi modules, has paid 57 percent premium over NetLogic’s share price on Friday, as reported in The Wall Street Journal.
According to the company, board members of both companies approved the deal, which will be concluded in the first half of 2012, if regulatory procedures go well. Broadcom also said that it expects its revenue for the third quarter to be between $1.9 billion to $2 billion. Broadcom had made $1.8 billion in revenue in the third quarter of last year.
“This greatly expands our market opportunities in the networking space. We’ll be the only company that provides complete end-to-end solutions in networking,” said Broadcom’s CEO Scott A. McGregor.