RED BANK, N.J. (ChipWire)-- In a move to expand its DSL chip business, GlobeSpan Inc. has reached a definitive agreement to acquire PairGain Technologies Inc.'s microelectronics group for about $90 million in stock.
PairGain, of Tustin, Calif., a supplier of equipment for DSL applications, in recent months put its captive chip operations on the block as part of a cost cutting move. It had been developing its own chips for its DSL equipment. More recently, however, the company has been sourcing more of its components from a number of third-party vendors.
As part of the latest acquisition agreement, PairGain will continue to source chip sets from its former microelectronics group, which makes ICs for consumer- and business-oriented DSL applications.
PairGain will also establish a southern California design center to support those efforts, according to Armando Geday, president and chief executive of GlobeSpan. The deal to acquire PairGain's IC operations will also significantly boost GlobeSpan's own DSL-chip efforts, he added.
Under the terms, GlobeSpan will exchange about 1.08 million shares of its common stock. The deal is expected to close this quarter.