Eleven years of development, $55 million in investments, 150 employees, and hundreds of millions of smartphones clogging up mobile networks and needing a technology solution are the factors behind one of the more impressive exits by an Israeli high-tech company announced today.
As "Globes" was the first to report, Provigent Ltd. has been sold to telecommunications semiconductor developer Broadcom Corporation (Nasdaq: BRCM) for $313 million, plus Provigent's cash, which could bring the deal to $340 million, after a nine-month relationship and negotiations for much of this period. This is Broadcom's eight acquisition in Israel, and brings its acquisitions here to $1 billion.
Provigent won first place in the "Globes" Most Promising Start-ups for 2010. The company had $25 million in sales in 2010, and will reportedly reach $40-50 million in sales this year. The company has been profitable for 18 months. Broadcom said that the acquisition will not affect its profitability in 2011.
It turns out that Broadcom was the model that Provigent used to raise its initial capital. "The name Broadcom appeared on page 3 of our presentation to demonstrate that investment in vendors of system-on-a-chip (SoC) solutions could succeed," Provigent founder and CEO Dan Charash told "Globes" today.
Over the past year, Provigent's shareholders had considered an IPO on Nasdaq for the company. Charash says that the sale was no small matter. "There was a serious dilemma whether to sell or float. We could have gone in several ways, but we realized that the right decision was to sell to Broadcom."
Charash and Guy Reshef founded Provigent in 2000. The company develops SoC solutions for wireless reception and transmission for the connection between antennas and the heart of wireless networks, a growing high-tech segment.
Broadcom, which has a market cap of $21.7 billion, plans to add Provigent's employees to its Israeli R&D center.
Published by Globes [online], Israel business news - www.globes-online.com - on March 21, 2011
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