Zacks_Analysts' Blog : Broadcom Will Acquire Provigent - Analyst Blog

Leading chipmaker Broadcom Corporation (BRCM) recently signed an agreement to acquire privately-held Provigent for approximately $313 million.

Provigent is a leading provider of innovative Systems-on-a-Chip (SoC) solutions for the broadband wireless transmission industry, offering highly integrated, high performance, mixed signal semiconductors for microwave backhaul systems. The company has offices in Israel and Santa Clara, California.

The transaction will close in the second quarter of 2011. Broadcom will pay the purchase price in cash, except that a portion attributable to certain unvested employee stock options will be paid in Broadcom restricted stock units.

Broadcom already provides one of the industry's broadest portfolios of Ethernet networking solutions for infrastructure, including mobile backhaul. With the addition of Provigent's engineering expertise in microwave radio products, Broadcom will be able to expand its footprint in the $5 billion microwave backhaul equipment business.  

Provigent’s portfolio addresses the ever-growing demand for high-capacity mobile backhaul systems that connect 2G, 3G and 4G (LTE and WiMAX) sites. Carriers are faced with the challenge of backhauling data from the cell sites to the core network to manage the robust growth in wireless traffic and transition to 4G networks. Microwave backhaul is the most prevalent type of technology used in the multi-billion dollar global mobile backhaul business.

Provigent is a privately-owned company. Its investors include prominent venture capital firms such as Sequoia Capital, Pitango Venture Capital, Lightspeed Venture Partners, Globespan Capital Partners, Ascend Technology Ventures, Magma Venture Partners and Delta Ventures. Other investors include Dr. Andrew Viterbi, co-founder of Qualcomm (QCOM), and Mr. Ray Stata, Chairman & co-founder of Analog Devices (ADI).