Broadcom Corporation, a provider of integrated circuits enabling broadband communications has signed a definitive agreement to acquire Element 14, a developer of high-port density, low-power digital subscriber line (DSL) chipsets, software and communications processor technology.
Founded in 1999, Element 14 is a privately held, fabless semiconductor company headquartered in Cambridge, UK, with additional design centres in Bristol, UK, and Mechelen, Belgium. Element 14 has a team of 68 people focused on DSL system design, mixed-signal design and DSP design for communications applications. The company has been granted or has filed applications for 19 patents.
Element 14 is developing what is anticipated to be the industry’s first 12-port, full-rate ADSL solution for the central office (CO). The transceiver chipsets in the CO convert high frequency analogue signals from multiple DSL connections into packets and cells and aggregate these for transmission on high-speed backbones. With Element 14’s technology, Broadcom will enable equipment vendors of DSL access multiplexers (DSLAMs) and digital loop carriers (DLCs) to offer an increase in the number of DSL-enabled copper twisted-pairs that can be supported within their tight heat, power and space constraints. Follow-on products are planned for standards-based symmetric DSL markets
Following the acquisition, Broadcom will establish a new DSL business unit. This new business unit will encompass Broadcom’s VDSL and ADSL businesses, and all related telco local loop transmission activities.
In connection with the acquisition, Broadcom will issue in aggregate about 2.65 million shares of its Class A Common Stock in exchange for all outstanding shares of Element 14 Preferred and Common Stock and upon exercise of outstanding employee stock options, warrants and other rights of Element 14.
The merger transaction is expected to close within 60 days and will be accounted for under the purchase method of accounting. The boards of directors of both companies have approved the merger, which awaits approval by Element 14’s shareholders and the satisfaction of regulatory requirements and other customary closing conditions.
Broadcom expects to record one-time charges for purchased in-process research and development expenses, and employer’s national insurance contribution expense for UK employees, related to the acquisition, in its fourth fiscal quarter (ending December 31).
Broadcom is at www.broadcom.com.