MC-Sierra and Quantum Effect Devices have entered into a definitive merger agreement. Based on today’s closing price, PMC-Sierra shares with a value of approximately $2.3 billion will be issued to QEDI stockholders at an exchange ratio of 0.385 PMCS shares per QEDI share.
The transaction will be accounted for as a pooling of interests and is subject to the satisfaction of customary closing conditions, including QEDI stockholder approval and expiration of the regulatory waiting period.
Quantum Effect Devices is a provider of MIPS processors for networking applications,’ said Bob Bailey, PMC-Sierra’s chairman and CEO. ‘This is one of the most widely adopted architectures in the broadband infrastructure and is a synergistic addition to our rapidly expanding offering of broadband communications semiconductors.
QED’s products are very complementary to PMC-Sierra’s solutions for the access and core infrastructure applications which include our recent acquisitions of several DSP-based technology companies,’ Bailey noted. ‘As the power of processors increase, they will become more commonplace in the line cards of routers and switches. With this acquisition, PMC-Sierra will now be positioned to provide more of the critical silicon for these applications including an open architecture microprocessor.’
‘We are pleased to join forces with a broadband communications leader like PMC-Sierra,’ said Tom Riordan, president and CEO of Quantum Effect Devices. ‘This acquisition is extremely strategic for both companies as we combine our MIPS processor expertise with PMC-Sierra’s product line to offer a more comprehensive broadband communications semiconductor solution for all of our customers.’
The Quantum Effect Devices team of over 100 employees will join PMC-Sierra as a new business unit within the company. Tom Riordan will report to Bob Bailey as vice president and general manager of the new business unit.