Broadcom to acquire NetLogic with 700 patents for $3.7 bn

Maker of semiconductors for wired and wireless communications, Broadcom Corp, is buying communications chip maker NetLogic Microsystems for about $3.7 billion in cash to expand its patent portfolio and footprint in fourth-generation wireless networks.

Proposing to make its largest acquisition to date, Broadcom today said that it will offer $50 per share, a premium of 57-per cent to NetLogic's closing price on 9 September.

Santa Clara, California-based NetLogic makes high-performance intelligent chips that power next-generation Internet networks.  NetLogic chips are used in 3G/4G mobile wireless infrastructure, data centre, enterprise, metro Ethernet, edge and core infrastructure networks. 

Its product portfolio includes high-performance multi-core processors, knowledge-based processors, content processors, network search engines, digital front-end PHYs, high-speed 10/40/100 gigabit ethernet PHY solutions, and low-power Embedded Processors.

Founded in 1995, the company reported sales of $382 million last year, but made a net loss of $66.4 million.

Broadcom, which makes chips for DVD players, digital television sets, high-speed mobile networks, cell phones and tablet PC's, is paying a hefty sum for the acquisition primarily for NetLogic's superior chips and most importantly for its portfolio of around 700 patents, which will add to its own 3,800 US and 1,550 foreign patents, in addition to over 7,800 pending patent applications.