Broadcom Completes Acquisition of Global Locate
Telecom chip maker Broadcom Corp. said Thursday evening that it had completed its acquisition of Global Locate Inc., a privately held provider of GPS and assisted-GPS chips and related software.
The acquisition is a strategic one for Broadcom, which specializes in wired and wireless semiconductors, and is known for its RF technology. The company notes that consumer interest in GPS applications is driving the market for GPS silicon; the market is expected to top $1 billion annually by 2012, Broadcom says, citing market research firm Forward Concepts.
Broadcom envisions combining Global Locate’s GPS technology with its own Bluetooth, Wi-Fi and cellular technologies, and supplying that combination to mobile handset makers.
Broadcom first announced plans to acquire Global LocateĀ in June. Broadcom, which saw nearly $3.7 billion in revenues last year, paid approximately $143 million in cash for all outstanding shares of capital stock in Global Locate. Under the terms of the deal a portion of that payable to Global Locate’s stockholders was put in escrow; up to $80 million in cash will be reserved for future payment to these stockholders, provided certain future performance goals are met.
In connection with the transaction, certain former stockholders of Global Locate are purchasing $3 million of Broadcom’s shares at Thursday’s closing price on the Nasdaq Global Select Market. Broadcom may record a one-time charge for in-process R&D expenses related to the acquisition in its current fiscal quarter, which ends Sept. 30. The amount of that charge, if any, has not yet been determined.
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