Chip maker Broadcom Corp. (BRCM.O) on
Monday took another step in its aggressive growth plan, buying
privately-held NewPort Communications Inc. for $1.28 billion in
stock as part of an expansion into the fast-growing fiber optics
The deal is the latest in a wave of acquisitions for Irvine,
Calif.-based Broadcom, which wants to be a one-stop-shopping
equipment and chip supplier to link computers, telephones and
televisions over high-speed networks.
Shares of Broadcom were up 8-15/16 to 234 near midday on the
Nasdaq stock market following news of the deal.
Broadcom said it would issue about 5.5 million Class A common
shares in exchange for all of NewPort's preferred and common
stock, employee stock options, warrants and other rights. NewPort
is also based in Irvine.
NewPort supplies high-speed communications chips for the
optical networking industry to enable the telecommunications
industry to support emerging bandwidth demands of multi-server
digital voice, data and video services.
"The acquisition of NewPort Communications ... is not only
synergistic with our 10-gigabit ethernet technology but is also
complementary to the communications processor technology that we
are acquiring through our merger with Silicon Spice Inc.,''
Broadcom President and Chief Executive Henry Nicholas said in a
statement. "Together, these acquisitions will provide Broadcom
with a powerful platform to address the rapidly growing wide area
"It's a fast-growing area and it looks like a pretty good
acquisition,'' said John Geraghty of Gerard Klauer Mattison.
In connection with the deal, Broadcom said it will record a