IRVINE, Calif. (ChipWire)-- Making its sixth acquisition in the last year, Broadcom Corp. has signed a definitive agreement to purchase BlueSteel Networks Inc. of Mountain View, Calif., a supplier of data-security chips, for about $120 million in stock.
The acquisition gives Broadcom a quick entry into the emerging data-security chip business. BlueSteel's chips provide cryptographic functions at system data rates ranging from 100 megabits to 1 gigabit per second.
"This is a powerful combination that brings Broadcom's broadband communications expertise together with BlueSteel's leadership in high-speed network security processors," said Henry T. Nicholas III, president and CEO of Broadcom. "This important acquisition provides Broadcom with a scalable family of security processors and cores with performance up to one 1 Gbit/s and beyond, to address a variety of VPN products and Broadcom system-on-chip devices."
Under the terms of the agreement, Broadcom will issue an aggregate of 375,000 shares of its Class B Common Stock in exchange for all outstanding shares of BlueSteel preferred and common stock and upon exercise of BlueSteel employee stock options and other rights. The merger transaction is expected to close within 60 days and will be accounted for as a pooling of interests.
The acquisition is Broadcom's sixth since the beginning of 1999, when it bought Maverick Networks Inc., a developer of Layer 3 switching chips, for $104 million. That deal was followed in April by the $316 million purchase of home-networking chip maker Epigram Inc., and the subsequent acquisition of Armedia Inc., HotHaus Technologies Inc., and AltoCom Inc.