Continuing in its acquisitive bent, Conexant Systems Inc. today announced plans to purchase HotRail Inc., a supplier of high-speed switching technology, in a stock deal valued at $400 million.
The acquisition of the privately-held HotRail will enable Conexant to deliver complete systems for next-generation Internet infrastructure equipment, including multi-terabit routers, asynchronous transfer mode (ATM) switches, Internet Protocol switches, gigabit Ethernet switches, and optical networking equipment, said Dwight W. Decker, chairman and chief executive of Conexant in Newport Beach, Calif.
San Jose-based HotRail will become part of Conexant's Broadband Internetworking Systems (BIS), a newly formed business unit within the company's Network Access Division. BIS focuses on the semiconductor solutions used for information processing in broadband networking services.
"With the increasing complexity of communications equipment for the Internet infrastructure, our customers are looking for comprehensive, robust, and innovative solutions from their key suppliers," Decker said. "Today's acquisition of HotRail will allow us to accelerate our strategy of delivering the complete silicon solutions that our customers require," he said.
In the past six months Conexant has acquired Maker Communications, a supplier of network processors and software, Microcosm, a provider of optical transceivers, and Applied Telecom, a telecommunications software company.
"With the addition of HotRail's innovative switching and interconnect technology to our comprehensive portfolio of semiconductor products, we now offer the major components of a total networking system solution," Decker said.
HotRail is developing scalable switch fabrics with integrated, multi-gigabit CMOS interconnections that enhance the development of networking switching systems. The switch fabrics operate at up to 256-Gbit/s.
Conexant plans to issue 7.8 million shares of stock, with a current value of about $400 million, to complete the acquisition. The transaction is expected to close this week.