SAN JOSE, Calif. - NetLogic Microsystems Inc. has signed a definitive agreement to acquire Optichron Inc., a privately-held, fabless semiconductor provider of 3G/4G LTE base station digital front-end (DFE) processors.
NetLogic (Santa Clara, Calif.) will pay the Optichron stockholders initial cash consideration of approximately $77 million upon the closing of the transaction. NetLogic will assume approximately $22 million of restricted stock units for employees of Optichron who join NetLogic Microsystems following the close of the acquisition.
Located in Fremont, Calif. Optichron’s DFE technology enables signal bandwidth, spectrum maximization and power efficiency for next-generation LTE deployments requiring the highest data rates and lowest power consumption.
The acquisition of Optichron will expand and broaden NetLogic's footprint in 3G/4G LTE base stations by complementing NetLogic's portfolio of multi-core processors, knowledge-based processors and 10 Gigabit Ethernet PHY solutions.
“DFE processors are an increasingly critical element of next-generation 3G/4G LTE common-platform base stations, and the combination of NetLogic Microsystems and Optichron further strengthens our technical leadership in this very exciting market,” said Ron Jankov, president and chief executive officer at NetLogic, in a statement.
Optichron has received investments from leading venture capital firms: US Venture Partners, TL Ventures, Battery Ventures, and VentureTech Alliance.
Over the years, NetLogic has expanded its offerings. In 2007, NetLogic bought, for $12 million in cash, a portfolio of network search engine products from Cypress Semiconductor Corp. At about the same time, NetLogic acquired privately-held Aeluros Inc., a fabless supplier of network interface and chip technologies.
In 2009, fabless chip company NetLogic agreed to buy RMI Corp., a vendor of multicore networking processors, for $175.4 million in stock and $8.0 million in cash. An additional $6.5 million would be paid if certain businessobjectives are reached, NetLogic said. In the same year, IDT sold the sell assets of its network search engine products to NetLogic for $90 million.
Earlier this year, NetLogic announced the XLP316S multi-core, multi-threaded processor which integrates Layer 7 knowledge-based processor technology. This processor that combines NetLogic's XLP multi-core processing and NETL7 knowledge-based processing technologies is ideal for next-generation network security appliances, deep-packet inspection (DPI) gateways, intrusion prevention systems (IPS) and anti-malware gateways.
The XLP316S multi-core, multi-threaded processor integrates 16 NXCPUs, and features a quad-issue, quad-threaded and superscalar out-of-order processor architecture capable of operating at up to 2.0-GHz. The XLP316S will be manufactured in the advanced 40-nm process, and is targeted to offer performance of 20-Gbps and 30 million packets-per-second (Mpps) for converged data plane and control plane processing in advanced network security applications.
This month, NetLogic announced breakthrough innovations in high-speed physical layer SerDes development that has resulted in the world’s lowest latency 10 Gigabit Ethernet (GbE) PHY solution for next-generation data centers.
NetLogic's dual-channel AEL2020-LL PHY with integrated SerDes features an ultra low-latency of 70 nanoseconds (ns), which is nearly a half of existing solutions. In addition to the ultra low-latency, the AEL2020-LL PHY device offers the industry’s lowest power consumption and supports multiple protocols and multiple media types – single-mode fiber (10GBASE-LR), multi-mode fiber (10GBASE-SR and 10GBASE-LRM), direct-attached copper (10GBASE-CR) and extended reach optics (10GBASE-ER).
Recently, NetLogic announced financial results for its fourth quarter and fiscal year ended Dec. 31, 2010. Revenue for the fourth quarter of 2010 was $100.4 million, a 0.4 percent sequential increase from $100.1 million for the third quarter of 2010 and a 44.5 percent increase from $69.5 million for the fourth quarter of 2009.
Fourth quarter 2010 net loss, determined in accordance with generally accepted accounting principles (GAAP), was $9.4 million or minus $0.14 per diluted share. By comparison, GAAP net loss was $37.2 million or minus $0.71 per diluted share for the fourth quarter of 2009. GAAP net loss for fourth quarter 2010 included stock-based compensation and related payroll taxes, changes in contingent earn-out liability, amortization of intangible assets and a release of deferred tax valuation allowance.
For the fiscal year 2010, revenue was $381.7 million, a 118.5 percent sequential increase from $174.7 million for fiscal year 2009. Fiscal year 2010 GAAP net loss was $66.4 million or $1.10 per diluted share. By comparison, GAAP net loss for fiscal year 2009 was $47.2 million or $1.02 per diluted share.
Meanwhile, in connection with the acquisition, NetLogic Microsystems will pay the Optichron stockholders initial cash consideration of approximately $77 million upon the closing of the transaction. NetLogic Microsystems will assume approximately $22 million of restricted stock units for employees of Optichron who join NetLogic Microsystems following the close of the acquisition.
In addition, NetLogic Microsystems will pay the Optichron stockholders an earn-out upon the attainment of performance milestones through 2012 for the acquired business. If the maximum earn-out is achieved, an additional cash consideration of approximately $108.5 million would be payable by March 31, 2013, and, an additional consideration of $12.5 million would be paid in shares of NetLogic Microsystems common stock (valued approximately at closing date value), issued only to several Optichron employees, subject to their continued employment after the acquisition. The acquisition has been approved by both companies’ board of directors, is expected to close in the second quarter of 2011 and remains subject to customary closing conditions.
As far as I know, Optichron is doing quite well in the DFE and its digital predistortion technology is leading in the industry. I just don't know if Netlogic can manage this small team well as this is quite different from the processor business they are used to.
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