Note the conference call available through 9/9/08. Info at end of release.
An additional post from a friend regarding this acquisition follows the PR.
<<<< Acquisition Expected to Bring Broadcom Scale, a Complete Product Line to Address All Segments of the Digital TV Market and Expand Tier One Customer Base
IRVINE, Calif. & SUNNYVALE, Calif., Aug 25, 2008 (BUSINESS WIRE) -- Broadcom Corporation (NASDAQ: BRCM), a global leader in semiconductors for wired and wireless communications, and AMD (NYSE: AMD) today announced that the companies have entered into a definitive agreement for Broadcom to acquire AMD's digital TV (DTV) business.
The acquisition of AMD's DTV business is expected to enable Broadcom to immediately scale its DTV business, and, in conjunction with its existing products, to offer a complete product line that covers all segments of the DTV market ranging from low-end value and mid-range quality to high-end interactive platforms and panel processors. The acquisition also is intended to expand Broadcom's existing tier one customer base, which includes the top DTV brands worldwide. This deal aims to enhance and strengthen Broadcom's innovative DTV system solution offerings while delivering the scale and focus needed to forge a market-leading DTV business.
In connection with the transaction, approximately 530 members of AMD's dedicated DTV team, in addition to certain employees directly supporting this team, located in six primary design centers around the world, will be invited to join Broadcom. AMD's DTV product line includes all Xilleon(TM) integrated DTV processors and complete turnkey reference designs, as well as NXT receiver ICs, the Theater(TM) 300 DTV processor, and a line of panel processors that perform advanced motion compensation, frame rate conversion and scaling.
"The acquisition of AMD's DTV business, which will become the core of Broadcom's DTV line of business, will enable us to significantly scale and accelerate the completion of our digital TV product portfolio while also expanding our tier one customer base and positions us to achieve leadership and long-term growth in this important market segment," said Daniel Marotta, Senior Vice President & General Manager of Broadcom's Broadband Communications Group. "We believe our combined DTV team will be in an excellent position to grow and thrive in this burgeoning market by bringing best-in-class people, technology, solutions and support to our customers."
"AMD is executing a strategic plan to transform the company, becoming leaner and more focused while seeking to create a business model to deliver sustainable profitability," said Dirk Meyer, President and Chief Executive Officer of AMD. "The sale of our DTV business is a key step in AMD's transformation, helping to strengthen our balance sheet, lower our breakeven point, and hone our focus in order to take full advantage of our position as a leader in both microprocessors and graphics technology. Broadcom will be a great fit for our talented DTV employees and the DTV products they have created."
In connection with the acquisition, Broadcom will pay approximately $192.8 million in cash in exchange for AMD's DTV assets. A portion of the consideration payable to AMD will be placed into escrow pursuant to the terms of the definitive asset purchase agreement. The board of directors of each company has approved the transaction and shareholder/stockholder approval of the transaction is not required by either company. The closing, which is targeted to occur during Broadcom's fourth quarter ending December 31, 2008, remains subject to customary closing conditions and review by relevant regulatory organizations. Broadcom may record a one-time charge for purchased in-process research and development expenses related to the acquisition in the quarter in which the transaction closes. The amount of that charge, if any, has not yet been determined.
Conference Call Information
Broadcom will conduct a conference call with analysts and investors today at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time). The company will broadcast the conference call via webcast over the Internet and will post its presentation material on the Investors section of the Broadcom website at http://www.broadcom.com/investors. To listen to the webcast, please dial (847) 619-6368 or visit the Investors section of the Broadcom website. The webcast will be recorded and available for replay until 12:59 a.m. Eastern Time, Tuesday, September 9, 2008 (9:59 p.m. Pacific Time, Monday, September 8, 2008). >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
<<<<<<<<<<<<<<Back in late July - AmTech put out a note saying that they thought this deal would occur.
Some important points from his report:
* Estimated yearly revenues from division at greater than $250 million per year. It's not clear if his estimate assumed the 50% growth rate BRCM talked about on the management call
* Estimated that BRCM would pay $250m - $375m (1x - 1.5x sales) -- BRCM is only paying $192m. A bargain ?
Here is the Digital TV Product Page at AMD's website - at some point - I can't distinguish a receiver from a decoder chip. They all sound like "media processors" to me.
This is what BRCM thinks is worth $192m :