Fabless semiconductor company Broadcom Corporation (Nasaq:BRCM) today announced that it has signed a definitive agreement to acquire Siliquent Technologies Inc.
Siliquent is a privately-held developer of Ethernet controllers that boost server performance, headquartered in Mountain View, with research and development facilities in Tel Aviv. The company has 59 employees.
Siliquent was founded in 2001 by CTO Amit Oren and EVP Dan Arazi. Prior to that, Oren was vice president of R&D at Orckit Communications Ltd. (Nasdaq:ORCT; TASE:ORCT) where he was responsible for system hardware and core ASIC development. Before Orckit, he was an engineer at the Ministry of Defense
At closing of the acquisition, Broadcom expects to pay approximately $76 million in cash in exchange for all outstanding shares of capital stock and vested options of Siliquent.
A portion of the consideration payable to the shareholders will be placed into escrow pursuant to the terms of the acquisition agreement. Broadcom will also assume all unvested employee stock options of Siliquent, which will entitle the holders to receive up to approximately 200,000 shares of Broadcom Class A common stock upon vesting.
Siliquent develops 10 Gigabit Ethernet (10GbE) network interface controllers (NICs) with advanced Ethernet processing technology for server networking, network storage and clustering applications.
Broadcom stated that the acquisition would significantly accelerate its delivery of 10GbE converged-NICs (C-NICs) for server LAN-on-motherboard (LOM) applications.
Gartner Dataquest predicts that 10GbE technology will begin its volume ramp in servers beginning in 2007. Blade servers are believed to be one of the likely early adopters of 10GbE C-NIC technology. According to IDC's "Worldwide Blade Server 2004-2008 Forecast," blade server shipments are expected to grow to 30% of server shipments by 2008.
The boards of directors of each of the companies and the shareholders of Siliquent have approved the merger. The closing is expected to occur during Broadcom's third fiscal quarter ending September 30, 2005.
Broadcom is one of the world's largest fabless semiconductor companies, with annual revenue of more than $2 billion. The company is headquartered in Irvine, Calif., with offices and research facilities in North America, Asia and Europe.
Broadcom plans to expand Siliquent’s Israeli R&D center. Siliquent has raised $39 million since it was founded in 2001.
Greylock Partners invested in Siliquent’s first financing round, and partners Moshe Mor and Charles Chi have been heavily involved in the company. Chi served as Siliquent CEO for over a year. Siliquent raised $21 million in its third and last financing round in September 2004. US fund Thomas Weisel Venture Partners led the round, with Vertex Venture Capital and Alta Berkeley Venture Partners participating, alongside existing investors Greylock, Benchmark Capital, and Orckit.
Alta Berkeley partner Pini Lozowick, who handles the fund’s investments in Israel, joined Siliquent as VP R&D after its investment.
Serial entrepreneur Barak Hachamov was involved in the founding of Siliquent. He was previously involved with Atrica, Corrigent Systems, and Veraz Systems.
Siliquent is the third Israeli company to be acquired by Broadcom.
Published by Globes [online], Israel business news - www.globes.co.il - on Tuesday, July 19, 2005