US semiconductor company Broadcom (Nasdaq: BRCM) has bought data center networking equipment developer Dune Networks for $178 million.
The deal is Broadcom's fourth acquisition in Israel.
Broadcom said that it had signed a definitive agreement to buy Dune for about $178 million, net of cash assumed from Dune. The deal is an all-cash one. However, the portion of the purchase price attributable to unvested employee stock options will be paid in Broadcom restricted stock units
Dune Networks develops switch fabric solutions for data center networking equipment. With companies looking to add bandwidth at data centers to meet the requirements of cloud computing, Dune Networks has developed a scalable chipset that supports bandwidth speeds of up to 100Gbps per port and can connect more than ten thousand servers (ports) in a single deployment.
Executives at the two companies pointed to the development of cloud computing as a driving force for the deal. Broadcom VP Martin Lund, who is also general manager of the company's network switching business, said, "Dune's massively scalable interconnect fabric, combined with our Ethernet products, augments our portfolio of solutions for data center networking equipment. This technology is particularly well suited to meet the emerging requirements for cloud computing networks at a large scale, and will enable us to address new market applications for Ethernet in the data center."
Dune Netoworks CEO Eyal Dagan said that customers will be able to "bring to market low cost, high performance data center switching that will enable end users to build next-generation cloud computing networks."
Broadcom rose $0.23 yesterday to $29.20, reflecting a market cap of $14.46 billion, The deal was announced after the close of trading yesterday.
Dune was established in 2000, and has received $50 million in venture capital funding from Pitango Venture Capital, Evergreen Venture Partners, and other investors.
Dune employs 100 workers, with offices in Yakum and in Sunnyvale, California.
Published by Globes [online], Israel business news - www.globes-online.com - on December 1, 2009
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