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Broadcom To Buy NetLogic For $3.7 Billion

Broadcom plans to buy NetLogic Microsystems, a developer of high-performance silicon for intelligent network infrastructure platforms, in a deal valued at about $3.7 billion net of cash assumed.

According to Broadcom, the deal will "meaningfully extend" its infrastructure portfolio with products including knowledge-based processors, multi-core embedded processors and digital front-end processors.

"This transaction delivers on all fronts for Broadcom's shareholders -- strategic fit, leading-edge technology and significant financial upside," Broadcom president and CEO Scott McGregor said in announcing the deal Monday.

The deal has been approved by the Broadcom and NetLogic boards and is subject to customary closing conditions, including the regulatory approvals and the approval of NetLogic Microsystems' stockholders. The transaction is expected to close in the first half of 2012.

According to the deal, NetLogic will be obliged to pay Broadcom a breakup fee of $127 million under certain circumstances.

Broadcom currently expects the acquisition to be accretive to earnings per share by approximately $0.10 on a non-GAAP basis in 2012.

Santa Clara, Calif.-based NetLogic, founded in 1995, has 645 employees. The company reported $381.7 million in sales and a net loss of $66.4 million for 2010.