Marvell to Acquire UTStarcom’s SoC Biz for $24M
Online staff -- EDN, December 22, 2005
Sunnyvale, Calif.-based storage, communications and consumer silicon solutions supplier Marvell said Wednesday it would acquire IP-based, end-to-end networking solutions and services provider UTStarcom Inc.’s system-on-chip (SoC) semiconductor design business division for $24 million in cash.
The acquisition also includes the assets related to UTStarcom’s purchase of Advanced Communications Devices Corp. in December 2001.
Alameda, Calif.-based UTStarcom’s semiconductor design business is primarily focused on developing wireless communications solutions including 3G wireless application technologies and silicon solutions for personal handyphone system (PHS) products, the company explained.
Dr. Sehat Sutardja, Marvell’s president and CEO said in a statement, “We are very excited to have this strong engineering team join the Marvell family as well as greatly expand our growing operations in China.”
The acquisition is expected to close within sixty days following the satisfaction of regulatory requirements and other customary closing conditions.
Also as part of the agreement, Marvell may pay an additional $16 million upon certain defined milestones being achieved.
Upon closing, Marvell may record a one-time charge for purchased in-process R&D expenses, yet to be determined.
“This divestiture is consistent with the corporate restructuring plan announced earlier this year which is focused on streamlining our business to our strategic handset and system level core competencies and better aligning the company’s resources with industry trends and sales opportunities in the marketplace,” said Hong Lu, CEO and president of UTStarcom.
“We believe that this transaction will allow us to maintain the cost benefits enabled by our internal development of ASIC chip design by leveraging the proven semiconductor capabilities of Marvell,” he concluded.
