January 23, 2006 Irvine, CA and Andover, MA -- Broadcom has signed a definitive agreement to acquire Sandburst Corp. , a privately-held fabless semiconductor company specializing in the design and development of scalable packet switching and routing systems-on-a-chip (SoCs) that are deployed in enterprise core and metropolitan Ethernet networks.
"By acquiring Sandburst, Broadcom is poised to accelerate the convergence of triple-play traffic in service provider networks," comments Ford Tamer, senior vice president and general manager of Broadcom's Networking Infrastructure group. "Furthermore, we will be well positioned to catch the next wave of the burgeoning metro Ethernet market."
According to a press release, at closing of the acquisition, Broadcom expects to pay approximately $80 million - $75 million in cash in exchange for all outstanding shares of capital stock and vested stock options of Sandburst, and up to 100,000 shares of Class A common stock reserved for future issuance in exchange for unvested employee stock options of Sandburst, which will be assumed by Broadcom and subject to vesting requirements. A portion of the cash consideration payable to the shareholders will be placed into escrow pursuant to the terms of the acquisition agreement.
The boards of directors of each of the companies and the stockholders of Sandburst have approved the merger. The closing, which is expected to occur during Broadcom's first fiscal quarter ending March 31, remains subject to customary closing conditions. Broadcom may record a one-time charge for purchased in-process research and development expenses related to the acquisition in its first fiscal quarter. The amount of that charge, if any, has not yet been determined.
Sandburst's switching and routing platform includes a packet processor, traffic management capabilities, and a switch fabric. The company says its technology is shipping today in advanced carrier-class switching platforms that drive converged voice, video, and data communications services across the Internet.
"Sandburst has an impressive customer base and a world-class design team that is well-respected in the industry," comments Martin Lund, vice president and general manager of Broadcom's Network Switching business unit. "By combining our industry-leading StrataXGS III Ethernet switch silicon solutions with Sandburst's innovative technology and engineering talent, Broadcom will be able to offer a complete portfolio of end-to-end Ethernet switch solutions."
Sandburst says it designs and develops switching platforms that target the high-end carrier-class chassis market. The company says its traffic management platform allows per-end-user service-level guarantees and enables the quality of service for packet-based triple-play communications over metro Ethernet networks. Specifically, the company says its technology offers per-subscriber QoS, which simultaneously ensures service integrity to hundreds of thousands of subscribers, regardless of the traffic load. The company says that switches and routers utilizing its technology enable service providers to deploy a range subscriber services across an Ethernet infrastructure.
"With its industry-leading position in Ethernet switching, Broadcom offers an ideal complement to Sandburst's HiBeam product family," concludes Vince Graziani, president and CEO of Sandburst. "We look forward to joining the Broadcom team, and to the opportunity to further extend Broadcom's leadership position in Ethernet switching from the SOHO, SMB, and enterprise markets to the enterprise core and metro Ethernet."