Broadcom expands into microwave backhaul

Broadcom Corp. announces that it has signed a definitive agreement to buy Provigent to bring in engineering expertise in microwave radio products that will expand its reach into the Rs.22,740.45 crore ($5B) microwave backhaul equipment business.

Provigent, a privately-held fabless SoC provider of mixed signal semiconductors for microwave backhaul systems has offices in Israel and California.

Broadcom already has one of the industry's broadest portfolios of Ethernet networking solutions for service provider infrastructure including the mobile backhaul.

Backhauling data from the cell sites to the core network is an important challenge facing carriers are wireless traffic grows and networks transition to 4G technologies. Microwave backhaul is the most prevalent type of technology used.

Broadcom expects to pay approximately Rs.1,423.55 crore ($313 million), net of cash assumed, to acquire all of the outstanding shares of capital stock and other equity rights of Provigent as part of the acquisition. The purchase price will be paid in cash, except that a portion attributable to certain unvested employee stock options will be paid in Broadcom restricted stock units. A portion of the cash consideration will be placed into escrow pursuant to the terms of the acquisition agreement. Broadcom expects the acquisition of Provigent to be neutral to earnings in 2011.

The boards of directors of the two companies have approved the merger. The transaction is expected to close in Broadcom's Q2 2011, and remains subject to the satisfaction of regulatory requirements and other customary closing conditions.