Broadcom Corporation announced that it signed a definitive agreement to acquire LVL7 Systems, Inc., a privately-held developer of production-ready networking software that enables networking original equipment manufacturers (OEMs) and original design manufacturers (ODMs) to reduce development expenses and compress development
"By combining LVL7's software expertise with Broadcom networking products, we are addressing our customers' growing demand for integrated hardware and software solutions," said Ford Tamer, Senior Vice President and General Manager of Broadcom's Enterprise Networking Group. "Additionally, the software offerings will enable Broadcom customers to address new and emerging markets--such as wireless LAN switching or voice over IP--more quickly, increasing the value of their current platforms."
LVL7's FASTPATH software will enable Broadcom to enhance its existing product offering in the small-to-medium-sized business (SMB) market segment. OEMs targeting the SMB market will benefit from the additional software capability that Broadcom is adding to its existing platforms because a complete software solution enables those customers to get new systems to market quickly and cost effectively.
Broadcom expects to pay approximately $62 million in cash to acquire outstanding shares of capital stock and vested stock options of LVL7 and liquidate outstanding LVL7 debt. A portion of the cash consideration payable to the stockholders will be placed into escrow
pursuant to the terms of the acquisition agreement. The boards of directors of the two companies and the stockholders of LVL7 have approved the merger.
The closing, which is expected to occur during Broadcom's fourth quarter ending December 31, remains subject to customary closing conditions. Broadcom may record a one-time charge for purchased in-process research and development expenses related to the acquisition in its fourth quarter. The amount of that charge, if any, has not yet been determined.