NEWPORT BEACH, Calif.--Conexant Systems Inc. here is acquiring Maker Communications Inc., the Framingham, Mass.-based developer of network processors, the company said here today.
The all-stock transaction, which has been approved by the boards of both companies, is valued at about $990 million, based on Conexant's closing stock price on Friday. Maker shareholders will receive 0.66 share of Conexant common stock for each share of Maker common stock. The acquisition is expected to close within 90 days.
Conexant said it aims to create the industry's largest portfolio of network processor and physical-layer (PHY) semiconductors for the Internet infrastructure. Including Maker's software solutions and development tools, this will enable a higher level of systems integration than any other communications chip company, Conexant said.
"Maker is a pioneer in the network processor market, with real products, customers and revenue. This acquisition strategically extends Conexant's network access product portfolio into high value, software-intensive, protocol processing applications," said Dwight W. Decker, chairman and CEO of Conexant, the former Rockwell Semiconductor unit that was spun off last year.
Conexant's Network Access Division provides PHY communications products, including asynchronous transfer mode (ATM), T1/E1 and T3/E3 carrier, optical networking (SONET/SDH), digital subscriber line (DSL), and multi-service voice and data access concentration.
"I characterize this as a bullseye in terms of where we want to place our weight in the network marketplace," said Decker in a teleconference with analysts this morning. He suggested that this would not be the last acquisition Conexant would be making in this arena.
"Network access is a prime area for us, and Maker can provide the foundation for further investments," he said.
Maker was founded in 1994 and employs 80 people. It went public in May of this year.
"Combining forces with a market leader that has the product breadth and geographical scope of Conexant gives Maker the opportunity to dramatically expand our network processor business worldwide," said William N. Giudice, president and CEO of Maker Communications. "The combination of our two companies will bring our customers a powerful new partner in designing and supplying the critical product technologies driving broadband Internet services and content to an exploding subscriber base."