PMC-Sierra buys Wintegra
The acquisition of Wintegra expands PMC-Sierra’s presence in Israel, where its FTTH business is based.
PMC-Sierra will pay Wintegra $240 million, less an estimated net cash amount of $27 million on Wintegra’s balance sheet at time of closing, for a net purchase price of $213 million. PMC-Sierra intends to use its existing balance sheet cash to finance the acquisition. PMC-Sierra will pay up to an additional $60 million based on growth and performance milestones in 2011.
The acquisition of Wintegra expands PMC-Sierra’s presence in Israel, where its FTTH business is based. In 2006, PMC-Sierra acquired Herzliya-based Passave, a developer of system-on-chip semiconductor solutions for the Fiber To The Home (FTTH) access market, for $300 million.
Wintegra has 165 employees with the majority of its R&D development team located in Ra’anana, and in Austin, Texas. Wintegra founders Kobi Ben-Zvi and Robert O’Dell will join PMC-Sierra.
Wintegra’s WinPath network processors and software are used in 3G and 4G base stations, fiber and microwave cell-site routers, as well as radio network controllers deployed globally in mobile networks. These single-chip solutions enable carriers to increase throughput on their mobile backhaul networks while successfully scaling and migrating to packet-based architectures.
Mobile networks worldwide face explosive growth in video and data traffic fueled by the rapid adoption of 3G and 4G smartphones, tablets, and netbooks, so carriers are upgrading their mobile backhaul equipment as they move from TDM to packet-based architecture. Packet-based mobile backhaul enables carriers to increase bandwidth capacity to accommodate projected ten times growth in mobile data traffic over the next three to four years.
PMC-Sierra president and CEO Greg Lang said, “Carriers are moving rapidly to IP-based mobile backhaul, and Wintegra’s product offering is uniquely positioned to enable this packet transition and breakthrough the bandwidth bottlenecks faced in mobile networks.”
The transaction is expected to be immediately accretive to PMC-Sierra’s earnings.
PMC-Sierra shares rose 6.56% on Friday to close at $7.47, giving a $1.73 billion market cap.
Published by Globes [online], Israel business news - www.globes-online.com - on October 24, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010
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