Broadcom Corporation (BRCM) announced that it has completed the acquisition of Teknovus, a leading supplier of Ethernet Passive Optical Network (EPON) chipsets and software. EPON is a technology providing broadband service at up to 10 Gigabits per second over fiber optic cables. EPON represents approximately 94% of the FTTx (e.g. Fiber-to-the-Home) connections in the Asia Pacific region and is expected to grow at 33% through 2014.
Broadcom paid approximately $123 million for the acquisition. The purchase price was paid in cash, with a portion escrowed pursuant to the terms of the acquisition agreement. Broadcom expects that the acquisition of Teknovus will be approximately neutral to earnings per share in 2010.
Management stated that since Broadcom specializes in Ethernet switching and as the EPON market segment evolves and expands, technologies of both companies can be combined to form a higher performance, lower cost EPON-based access infrastructure.
Broadcom also made a strategic investment in Tilera Corporation. Based in California, Tilera Corporation is a developer of high performance multicore processors offering an innovative multiprocessor approach for scalable performance and breakthrough power efficiency. Tilera has also appointed Nariman Yousefi, Senior Vice President of Infrastructure Technologies at Broadcom, to its Board of Directors.
Broadcom consistently introduces highly integrated solutions in some of the fastest growing markets in the technology sector. Broadcom’s prospect of growth continues to outpace its peers, given its leading ability to integrate communications and processing. California-based Broadcom is a leading chipmaker of products used in wired and wireless communications.
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