Category Archive : Avago acquires broadcom

2 Oct, 2012 | Nikotilar | Comments

Avago acquires broadcom

O and Samsung Electronics Co Ltd The combined company, to be based in Singapore and known as Broadcom, will be the third-largest U. Demand for cheaper chips and new products to power Internet-connected gadgets is driving consolidation in the industry. N in March. Avago had also bid for Freescale, people familiar with the matter said at the time.

Avago and Broadcom first spoke about a potential merger in October but could not agree on a price, said people familiar with the matter who are unauthorized to speak publicly about it. Talks heated up in April when Avago approached Broadcom again with higher offers, and negotiations continued until the two agreed on a deal. Private equity firm Silver Lake Partners, which is an Avago investor and holds a board seat, worked closely with the company to help evaluate Broadcom and structure the deal, said two sources who are unauthorized to speak publicly about the deal.

Irvine, California-based Broadcom has been struggling to grow as competition in the mobile chip business intensifies. Broadcom shareholders will own about 32 percent of the combined company. They would also have the option to choose between various combinations of cash and stock. Nwhile Evercore served as financial adviser to the Special Committee of the board. Discover Thomson Reuters. Directory of sites. United States. Liana B.

BakerSupantha Mukherjee. Corrects May 29 story to correct name in final paragraph to Foerster from Forester. A man passes Broadcom's Asia operations headquarters office at an industrial park in Singapore September 16, Avago has established a strong track record of successfully integrating companies onto its platform.

Together with Broadcom, we intend to bring the combined company to a level of profitability consistent with Avago's long-term target model. For our shareholders, the transaction provides both compelling up-front value as well as the opportunity to participate in the future upside of the combined business.

Today's announcement is a continuation of that vision and we could not think of a better partner for the future than Avago," stated Dr. Henry T. I am confident that, under the visionary leadership of Hock Tan, the combined company will realize its potential to be the world's greatest semiconductor company.

Following completion of the transaction, Mr. Samueli will join the board of the combined company as will another director from Broadcom. In addition, Dr. Samueli will be appointed Chief Technology Officer of the combined company. Nicholas will serve in a strategic advisory role within the combined company, reporting to Mr.

Upon closing of the transaction, Avago shareholders will exchange their ordinary shares for HoldCo ordinary shares on a one to one basis. No trading market is expected to develop for the restricted equity. The receipt of the restricted equity is expected to be tax free to former Broadcom shareholders, and if a requested tax ruling is obtained from the IRS, the receipt of HoldCo ordinary shares will also be tax free to the Broadcom shareholders.

Receipt of HoldCo ordinary shares by former Avago shareholders is expected to be tax free. The transaction has been unanimously approved by the boards of directors of both companies, as well as a special committee of the independent directors of Broadcom.

avago acquires broadcom

Samueli and Dr. Nicholas, the founders of Broadcom, have signed support agreements to vote to approve the transaction. Closing of the transaction is expected by the end of the first calendar quarter ofand is subject to regulatory approvals in various jurisdictions, as well as the approval of Avago's and Broadcom's shareholders. Avago and Broadcom management will host a conference call to discuss details of the transaction.

A live webcast and the accompanying presentation relating to the transaction will be available in the "Investors" section of Avago's website at www. A webcast of the conference call will also be available in the "Investors" section of Avago's website at www. Avago also today issued a separate press release announcing its second quarter fiscal year financial results. Avago management will not host its conference call to discuss the results, which had previously been scheduled to take place at p.

Pacific Time on May 28, Avago Limited is a leading designer, developer and global supplier of a broad range of analog semiconductor devices with a focus on III-V based products and complex digital and mixed signal CMOS based devices. Avago's product portfolio is extensive and includes thousands of products in four primary target markets: wireless communications, enterprise storage, wired infrastructure and industrial and other.

Broadcom Corporation is a global leader and innovator in semiconductor solutions for wired and wireless communications. Broadcom products seamlessly deliver voice, video, data and multimedia connectivity in the home, office and mobile environments.

With one of the industry's broadest portfolios of state-of-the-art system-on-a-chip solutions, Broadcom is changing the world by connecting everything. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of the management of Avago and Broadcom, as well as assumptions made by, and information currently available to, such management.

Forward-looking statements may be accompanied by words such as "aim," "anticipate," "believe," "plan," "could," "would," "should," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "will," "possible," "potential," "predict," "project" or similar words, phrases or expressions.

These forward-looking statements are subject to various risks and uncertainties, many of which are outside the parties' control.A transaction could be announced as soon as Thursday, although this person cautioned that talks were continuing and might still fall apart.

Exact terms could not be immediately learned, but it is expected to be a cash-and-stock bid. If completed, the deal would be the latest in the chip-making industry, which has been swept by a wave of consolidation as companies look to gain scale and negotiating leverage with customers. And earlier this year, Intel, the heavyweight of the computer chip industry, was said to have held talks to buy Altera, whose chips are used in radios, cars and at factories.

The takeover was a bet on the rising use of cloud and mobile software and allowed Avago to move into a sector with relatively healthy profit margins. Broadcom was founded in by a professor at the University of California, Los Angeles, and his student. It initially specialized in digital computer networking semiconductors, and expanded into many other types of communications chips, used in smartphones, high-end televisions and Wall Street supercomputers.

Under its current chief executive, Scott A. McGregor, who has degrees in psychology and computer science, the company has produced thousands of different kinds of chips, mostly so-called off-the-shelf items that electronics designers can purchase cheaply and use in new devices. While the explosion of connected devices has made this a good business, most of the chips have relatively low profit margins.

McGregor has said that he is fine with that, hoping to sell some chips in very large volumes. Avago was originally a part of Agilent, the former semiconductor arm of Hewlett-Packard, and was spun out by its then-owners, the private equity firms Silver Lake and Kohlberg Kravis Roberts in Its most recent takeover was that of Emulex, a networking equipment and services company, this year.

Avago to buy Broadcom for $37 billion in biggest-ever chip deal

The chip maker said in its most recent annual report that its actual tax rate on income before income taxes in its fiscal year was about 9. Shares of Broadcom closed up DealBook Business and Policy. Home Page World U.Avago has established a strong track record of successfully integrating companies onto its platform.

Together with Broadcomwe intend to bring the combined company to a level of profitability consistent with Avago's long-term target model. For our shareholders, the transaction provides both compelling up-front value as well as the opportunity to participate in the future upside of the combined business.

Today's announcement is a continuation of that vision and we could not think of a better partner for the future than Avago ," stated Dr. Henry T. I am confident that, under the visionary leadership of Hock Tan, the combined company will realize its potential to be the world's greatest semiconductor company.

Following completion of the transaction, Mr.

avago acquires broadcom

Samueli will join the board of the combined company as will another director from Broadcom. In addition, Dr. Samueli will be appointed Chief Technology Officer of the combined company.

avago acquires broadcom

Nicholas will serve in a strategic advisory role within the combined company, reporting to Mr. Upon closing of the transaction, Avago shareholders will exchange their ordinary shares for HoldCo ordinary shares on a one to one basis.

No trading market is expected to develop for the restricted equity. The receipt of the restricted equity is expected to be tax free to former Broadcom shareholders, and if a requested tax ruling is obtained from the IRSthe receipt of HoldCo ordinary shares will also be tax free to the Broadcom shareholders. Receipt of HoldCo ordinary shares by former Avago shareholders is expected to be tax free.

The transaction has been unanimously approved by the boards of directors of both companies, as well as a special committee of the independent directors of Broadcom. Samueli and Dr. Nicholas, the founders of Broadcomhave signed support agreements to vote to approve the transaction.

Closing of the transaction is expected by the end of the first calendar quarter ofand is subject to regulatory approvals in various jurisdictions, as well as the approval of Avago's and Broadcom's shareholders. Avago and Broadcom management will host a conference call to discuss details of the transaction. A live webcast and the accompanying presentation relating to the transaction will be available in the "Investors" section of Avago's website at www. A webcast of the conference call will also be available in the "Investors" section of Avago's website at www.

Avago also today issued a separate press release announcing its second quarter fiscal year financial results. Avago management will not host its conference call to discuss the results, which had previously been scheduled to take place at p. Pacific Time on May 28, Avago Limited is a leading designer, developer and global supplier of a broad range of analog semiconductor devices with a focus on III-V based products and complex digital and mixed signal CMOS based devices.

Avago's product portfolio is extensive and includes thousands of products in four primary target markets: wireless communications, enterprise storage, wired infrastructure and industrial and other. Broadcom Corporation is a global leader and innovator in semiconductor solutions for wired and wireless communications. Broadcom products seamlessly deliver voice, video, data and multimedia connectivity in the home, office and mobile environments.

With one of the industry's broadest portfolios of state-of-the-art system-on-a-chip solutions, Broadcom is changing the world by connecting everything.O, the largest merger of chipmakers.

Though bankers suggest there is no firm breakdown yet, the financing is expected to include a term loan A and a term loan B component. A hefty pro rata portion that may tap the market first is anticipated to at least partially quench the U.

Avago Completes Acquisition of Broadcom

A term loan B will likely follow, and will help boost the low supply of institutional paper that year-to-date has contributed to the wave of repricings and refinancing currently making its way through the market. O is also anticipated to bring more supply to the equation. The mega deal will include a large leveraged component as well. Adjusted leverage for the combined company will be about 3. The credit facility will permit dividends and share repurchases. The transaction is expected to close by the end of the first quarter ofaccording to the presentation.

Though the Avago transaction is expected to go through significant anti-trust scrutiny, bankers do not expect any regulatory delays. The Avago financing roster closely mirrors the lineup the company tapped for its purchase of semiconductor designer LSI Corp in Maywith the addition of Credit Suisse. Discover Thomson Reuters. Directory of sites.

Broadcom acquires Brocade in $5.9 billion deal

United States. Kristen Haunss.The combined company will be strongly positioned to capitalize on the growing opportunities created by the rapid increases in data center IP and mobile data traffic.

In addition to these powerful strategic benefits, as we integrate LSI onto the Avago platform, we expect to drive LSI's operating margins toward Avago's current levels, creating significant additional value for stockholders.

The transaction is expected to be significantly and immediately accretive to Avago's non-GAAP free cash flow and earnings per share. The transaction has been approved by the boards of directors of both companies and is subject to regulatory approvals in various jurisdictions and customary closing conditions, as well as the approval of LSI's stockholders.

Avago Technologies will host a conference call, solely to discuss details of the transaction. A live webcast and the accompanying presentation relating to the transaction will be available in the "Investors" section of Avago's website at www.

The presentation will also be available as an attachment to a Form 8-K being furnished to the Securities and Exchange Commission and available on its Edgar system. A webcast of the conference call will also be available in the "Investors" section of Avago's website at www. This non-GAAP information excludes amortization of acquisition-related intangibles, share-based compensation expense, restructuring charges, acquisition-related costs, debt extinguishment losses and the income tax effects of these excluded items.

Management does not believe that the excluded items are reflective of the Company's underlying performance. The exclusion of these and other similar items from Avago's non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent or unusual. Avago believes this non-GAAP financial information provides additional insight into the Company's on-going performance and has therefore chosen to provide this information to investors for a more consistent basis of comparison and to help them evaluate the results of the Company's on-going operations and enable more meaningful period to period comparisons.

These non-GAAP measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Avago Technologies Limited is a leading designer, developer and global supplier of a broad range of analog semiconductor devices with a focus on III-V based products.

LSI Corporation Nasdaq:LSI designs semiconductors and software that accelerate storage and networking in datacenters, mobile networks and client computing. Our technology is the intelligence critical to enhanced application performance, and is applied in solutions created in collaboration with our partners.

More information is available at www. Silver Lake is a global leader in private investments in technology and technology-enabled industries.

Silver Lake invests with the strategic and operational insights of an experienced industry participant. For more information about Silver Lake and its entire portfolio, please visit www. This communication may contain forward-looking statements.But the company has long wanted to grow through deal-making, and it took its most ambitious step on Thursday.

The transaction, one of the biggest deals for a chip maker, illustrates the growth-by-acquisition strategy that Avago has followed since spinning out from its former corporate parent. It also highlights the broader wave of consolidation that has swept over the computer chip industry as manufacturers have sought to expand to keep pace with customers like Apple and Amazon.

In recent years, chip makers have turned to buying growth to cut costs, using mergers to combine sales forces and back-end operations.

avago acquires broadcom

The bigger scale also allows them to stay attractive to customers who want to cut the number of suppliers for their products. Others like Qualcomm and Infineon have also made acquisitions. But Avago has been more open than most about using mergers as an engine for growth. Some analysts have compared the company, born as a component division of Hewlett-Packard, to Valeant Pharmaceuticals, a drug maker whose meteoric growth has been powered by serial acquisitions. Avago was originally a part of Agilent Technologies, the former semiconductor arm of HP.

It was spun out in an initial public offering in by its owners at the time, the private equity firms Silver Lake and Kohlberg Kravis Roberts.

Since Avago became a public company inits management team has pursued a half-dozen acquisitions. But Avago has had its eye on bigger game for some time. Broadcom, which is based in Irvine, Calif. Its products include chips that are used in a variety of technologies, including smartphones and set-top boxes for satellite television. Current Broadcom shareholders would own about 32 percent of the combined company.

Though Broadcom shares fell 1. Investors and analysts have speculated that another bidder may emerge. DealBook Business and Policy.

Home Page World U.