Conexant Systems announced plans to acquire GlobespanVirata, creating a combined company with an annual revenue run-rate of approximately $1.2 billion and an extensive portfolio of silicon designs targeted at the broadband digital home. GlobespanVirata shareholders will receive 1.198 shares of Conexant common stock for each share of GlobespanVirata stock. Current Conexant shareholders will own 62.75% and current GlobespanVirata shareholders will own 37.25% of the combined company's shares. Some highlights of the announcement:
- the merged company will retain the name Conexant Systems and its stock will continue to trade on the NASDAQ national market under the ticker symbol "CNXT".
- the merged company will employ approximately 2,400 people worldwide and will be headquartered in Red Bank, New Jersey at GlobespanVirata's current headquarters.
- Armando Geday will serve as chief executive officer of the company and Matt Rhodes will be president. Dwight Decker will assume the role of chairman.
- Earlier this year, GlobespanVirata acquired Intersil's Wireless Networking Product Group for $365 million in cash and common stock. Intersil's Wireless Networking Product Group focuses on the WLAN semiconductor market. GlobespanVirata is a developer of DSL chipsets. The companies cited the synergies of their respective product lines in home networking, consumer electronic networking and wireless data segments. GlobespanVirata said WLAN capabilities are becoming integral to DSL CPE designs. Intersil's Wireless Networking Product Group has over 300 employees and is based in Florida. The group has its origins in Harris Corporation.
- In October 2001, GlobeSpan merged with Virata, another developer of DSL silicon.
- GlobeSpan was formed in 1996 through a spin-off from Lucent Technologies. The company's core engineering team was among the earliest developers of DSL technology at AT&T Bell Labs.
- Last week, Conexant Systems reported quarterly revenues of $164.7 million, up 9% over the prior quarter and up 24% over the same period last year. There was a pro forma operating profit of $6.7 million. Revenue from ADSL modem and satellite set-top box solutions, two key growth areas for the company, increased more than 30% sequentially.
