Israeli company VisionTech has been acquired by the US chip giant Broadcom. Under the terms of the agreement, Broadcom is buying all of VisionTech’s assets and obligations in return for 8 million Broadcom shares, worth $800 million on the stock exchange today, following Broadcom’s 16.7% fall yesterday to $97.5.
VisionTech’s employees and assets will be transferred to the new company, to be called Broadcom-Israel, which will managed by VisionTech general manager Amir Morad. The main beneficiaries of the deal are expected to be the company’s shareholders: the founders (25%); strategic investors including Sega and the Japanese CSK concern (40%), private Israeli, Japanese and US investors; Israeli venture capital company Vertex (3%); and company employees (10%, plus options).
VisionTech was founded at the end of 1996 by Amir Morad and Leonid Yavitz, two Technion graduates. The company develops and manufactures next generation video and audio compression and deployment chips for household electric appliances, Internet networks and broadband communications. VisionTech’s Kfir chip compresses and decodes video, audio and data signals for cable and satellite converter, video and personal video receiver applications.
Morad says that VisionTech will become a regional business and R&D center for Broadcom international. It will develop broadband communications products and locate other investment, acquisition and merger opportunities among Israeli start-ups. “Broadcom-Israel will need all of VisionTech’s employees and more,” said Morad.
Published by Israel's Business Arena on 28 November 2000