IRVINE, Calif.-- Broadcom Corp. here today announced plans to acquire networking IC supplier Altima Communications Inc. for $533 million in stock. The transaction is aimed at expanding Broadcom's chip offering in applications for small-to-medium business networking systems, especially in Asia where the majority of those products are manufactured, said the Irvine company.
"Altima's well-established infrastructure in Asia will strengthen Broadcom's presence and enable us to better serve our customers engaged in the high-growth SMB small-to-medium business market segment," said Henry T. Nicholas III, president and CEO of Broadcom. He said San Jose-based Altima has a track record for rapid design and ramp of products into volume shipments in its targeted market segment.
"As a result of Altima's complementary market focus and engineering execution, we will inherit a non-overlapping revenue stream," added the chief executive officer.
Three-year-old Altima has assembled a team of engineers and customer support personnel in Taiwan, and it is expected to bring Broadcom significant capabilities in mixed-signal IC design and Ethernet networking. According to a forecast by The Dell'Oro Group, the small-to-medium business networking market for 10/100 Ethernet switches and hubs is expected to grow by over 100% this year and reach 58 million ports by 2001.
Broadcom said it plans to retain the Altima brand name for the small-to-medium business networking product line.
"We're excited to combine forces with Broadcom to better address the enormous opportunities in the SMB market," said Stewart Wu, president and chief executive officer of Altima. "Our team will benefit from Broadcom's excellent sales and marketing team, core technologies and manufacturing expertise to help accelerate introductions of next-generation solutions for the SMB market."
The transaction is expected to be completed within 60 days and be accounted for as a purchase by Broadcom in its financial results.