- QLogic (QLGC) is acquiring assets related to Broadcom's (BRCM) 10/40/100-gig Ethernet controller business, along with IP licenses related to Broadcom's NetXtreme II Ethernet controllers, for $147M in cash.
- In addition, QLogic is licensing Broadcom patents related to QLogic's Fibre Channel (storage networking) hardware for $62M, and will rely on Broadcom ASICs for NetXtreme II controllers. The license allows QLogic to avoid the type of lengthy legal battle archrival Emulex has seen with Broadcom.
- Broadcom says the deal will allow it to focus its "internal Ethernet controller efforts on strengthening its end-to-end data center platform." That suggests Broadcom is de-emphasizing the PC/workstation Ethernet controller market, where the company has long had a major position but has also faced stiff competition and price pressure.
- QLogic, meanwhile, is lowering its dependence on a Fibre Channel business that has seen very little growth in recent quarters, and is gaining additional products to cross-sell to enterprise hardware OEMs
- Both companies expect the deal to be accretive to EPS. QLGC +0.9% AH.
QLogic buying Broadcom Ethernet assets for $147M, licensing IP for $62M
Feb 18 2014, 18:24 ET