IRVINE, Calif.-- Broadcom Corp. today announced that it has signed a definitive agreementto acquire Pivotal Technologies Corp., a Pasadena, Calif.-based fabless semiconductor company developing digital visual interface (DVI) solutions.
No financial terms were disclosed. Broadcom will issue approximately 1.94 million shares of its Class B common stock in exchange for all outstanding shares of Pivotal preferred and common stock. At Tuesday's closing price for Broadcom's stock, the deal would be worth about $242 million. The transaction is expected to close shortly and will be accounted for as a pooling of interests.
Pivotal has developed both single- and dual-link DVI transmitters and receivers, as well as proprietary and scalable RF CMOS chips for both wired and wireless environments.
DVI is a broadly-supported display connection standard that will be used between a digital host, such as a PC, set-top box or DVD player, and a display device, such as an HDTV, flat panel display or digital CRT. Dual-ink DVI solutions are essential for higher resolutions like UXGA and QXGA (both high resolution standards for PCs).
In addition, Pivotal is combining high-bandwidth digital content protection (HDCP) technology with DVI, which allows secure transmission of uncompressed HDTV content from the set-top box to the digital TV. This is a key issue in the entertainment industry for the security and protection of copyrighted video material.
"This is a powerful combination that brings Broadcom's broadband communications expertise together with Pivotal's high-performance expertise in DVI and wireless communications," said Henry T. Nicholas III, president and CEO of Broadcom. "DVI with HDCP is an important addition to our digital set-top box product family. Also, Pivotal's leadership in RF technology, implemented in a low-cost standard logic CMOS manufacturing process, is a great fit with our existing efforts in digital CMOS tuners, Bluetooth and IEEE 802.11 wireless LAN standard. Pivotal's expertise in these areas will be important for hitting the cost targets that these applications will require."
With the advances in flat panel technology and recent increases in capacity, the flat panel display and digital TV markets are on the verge of explosive growth. Makers of PCs, set-top boxes, and DVD players, needing to be prepared to connect to all of the displays they are likely to encounter in their markets, are developing solutions with DVI transmitters.
"CRTs are also included in the DVI revolution," said K.C. Murphy, president and CEO of Pivotal
Technologies. "Some CRT vendors, citing manufacturing efficiencies dealing with fewer frequencies, have already announced digital CRTs that use the DVI interface and convert
the signal from digital to analog inside the monitor."