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PMC-Sierra acquires Wintegra

Posted: 26 Oct 2010 ?? ?Print Version ?Bookmark and Share

Keywords:network processors? mobile? backhaul equipment?

PMC-Sierra Inc. acquires Wintegra Inc. with the signing of the definitive agreement to buy the provider of network processors optimized for mobile backhaul equipment for $240 million.

The purchase hastens PMC-Sierra�s product offering in the IP/Ethernet packet-based mobile backhaul equipment market segment. The market is expected to grow 35 percent annually from $1.2 billion in 2009 to $5.5 billion in 2014, according to Infonetics research.

Wintegra�s family of network processors, dubbed WinPath, is used in 3G/4G base stations, fiber and microwave cell-site routers, as well as radio network controllers deployed globally in mobile networks. The processors come with networking software.

Wintegra has 165 employees with the majority of its R&D development team located in Ra�anana, Israel, and Austin, Texas. The acquisition of Wintegra expands PMC-Sierra�s presence in Israel, where its FTTH business is based. Wintegra�s founders, Kobi Ben-Zvi and Robert O�Dell, will join PMC-Sierra.

Under the terms of the deal, PMC-Sierra will pay Wintegra $240 million in cash consideration less an estimated net cash amount of $27 million on Wintegra�s balance sheet at time of closing, for a net purchase price of $213 million. Further, up to an additional $60 million of cash consideration may be paid if certain growth and performance milestones are reached by the end of 2011.

PMC-Sierra also reported results for Q3 2010. Net revenues in Q3 10 were $162.3 million, an increase of 24 percent compared to $130.9 million in Q3 2009. The Company reported net revenues of $160.7 million in the second quarter of 2010.

Net income in Q3 2010 on a GAAP basis was $15.2 million (GAAP diluted earnings per share of $0.06), compared with net income of $27.8 million (GAAP diluted earnings per share of $0.12) in Q3 2009 and net income of $30.1 million (GAAP diluted earnings per share of $0.13) in Q2 2010.

- Mark LaPedus
EE Times

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