SAN JOSE, Calif. - Broadcom Corp. has signed a definitive agreement to acquire Percello Ltd., a privately-held company that develops system-on-a-chip (SoC) solutions for femtocells, for $86 million in cash.
With the move, Broadcom enters into an emerging market. Femtocells are small, low power cellular base stations that extend coverage indoors where signals are weak.
Percello, an Israeli fabless semiconductor company, recently demonstrated its femtocell chip--the PRC6100. The PRC6100 is said to maximizes digital integration on a single chip to deliver the lowest cost and greatest security available for an HSPA+ femtocell. The chip contains high speed MIPS24Kc CPU, peripherals, femtocell L1 engine (FLE) and embedded DDR memory. The PRC6100 is compliant with 3GPP HNB specs. It supports at least eight users and offers HSPA+ data rates of 21.6 Mbps downstream and 5.76 Mbps upstream.
In connection with the acquisition, Broadcom expects to pay approximately $86 million, net of cash assumed from Percello, to acquire all of the outstanding shares of capital stock and other rights of Percello. The boards of directors of the two companies have approved the acquisition. The transaction is expected to close in Broadcom's fourth quarter, 2010 or by the end of Broadcom's first quarter, March 31, 2011 and remains subject to customary closing conditions.
Broadcom also reported unaudited financial results for its third quarter ended Sept. 30. Net revenue for the third quarter of 2010 was a record $1.806 billion. This represents an increase in net revenue of 12.6% compared with the $1.604 billion reported for the second quarter of 2010 and an increase of 44% compared with the $1.254 billion reported for the third quarter of 2009.
Net income computed in accordance with U.S. generally accepted accounting principles (GAAP) for the third quarter of 2010 was $327 million, or $.60 per share (diluted), compared with GAAP net income of $278 million, or $.52 per share (diluted), for the second quarter of 2010, and GAAP net income of $85 million, or $.16 per share (diluted), for the third quarter of 2009.