Broadcom Corp. has signed an agreement to acquire networking-IC specialist Altima Communications Inc. in a stock deal valued at $533 million.
The acquisition of Altima will accelerate Broadcom's penetration of the fast-growing small- to medium-business (SMB) networking market, said Henry T. Nicholas III, president and chief executive of Broadcom in Irvine, Calif.
San Jose-based Altima supplies ICs designed and optimized for the cost-sensitive SMB customer, with emphasis on low-power, small footprint, and low system cost, Nicholas said. Altima's existing customer base is predominantly in Asia, where the majority of SMB manufacturers reside, he said.
"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 market segment," Nicholas said. "Like Broadcom, Altima has established a track record for rapidly designing and ramping to volume production products that meet the requirements for its target market."
Broadcom plans to retain the Altima brand name for use in its SMB-targeted 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 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."
Broadcom plans to issue about 2.5 million shares of stock to finance the acquisition of Altima. The transaction is expected to close within 60 days.