Broadcom to Acquire Innovent Systems

Integrated circuit provider Broadcom Corp. (Irvine, CA) has signed a definitive agreement to acquire Innovent Systems Inc. (El Segundo, CA), a company specializing in the development and commercial integration of radio frequency (RF) integrated circuits for short-range wireless data communications, including the world's first fully integrated RF transceiver in pure digital CMOS.

Innovent's recently announced the availability of the Blutonium family of Bluetooth transceivers and systems extends Broadcom's communications leadership firmly into the wireless space, specifically the short-range market which analysts estimate will be a multi-billion dollar industry in the next few years. Innovent's patent-pending implementation of RF technology in a standard digital CMOS integrated circuit process provides significant cost and manufacturing advantages for short-range wireless products.

The company's Blutonium product line combines RF, baseband, systems, and software knowledge to enable products targeting Bluetooth applications in Personal Area Networks (PANs) and wireless Local Area Networks (LANs), including home networks. The chips enable high-performance short-range wireless communications between devices and equipment ranging from personal digital assistants and cell phones to personal computers, smart telephones, and other peripherals in the home and workplace. The first member of the Blutonium family, a CMOS Bluetooth RF transceiver, is available now for sampling to qualified customers.

Broadcom has supported the El Segundo, California-based business through a seed-stage investment, collaborative research and development, and has had close ties with the company from Innovent's inception in 1999. Broadcom presently owns approximately 13 percent of Innovent.

Personal Area Networks are emerging with the increased use of wireless electronic devices. PANs allow users to transfer information among multiple devices including cell phones, personal digital assistants and laptops, facilitating data sharing, data coordination and mobile communications using the emerging Bluetooth protocol. Innovent's core technology will also be targeted at other wireless applications and market segments, including home networking and wireless LANs.

In connection with the acquisition, Broadcom will issue an aggregate of approximately 3.0 million shares of its Class A Common Stock in exchange for all outstanding shares of Innovent Preferred and Common Stock and upon exercise of outstanding employee stock options and other rights of Innovent. 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 Innovent shareholders and the satisfaction of regulatory requirements and other customary closing conditions. In connection with the transaction, Broadcom expects to record a one-time write-off for purchased in-process research and development expenses in its third fiscal quarter (ending September 30).

Edited by Kristin Keiser