In a deal worth approximately $147 million Broadcom (BRCM) and Qlogic (QLGC) announced an agreement under which QLogic will acquire certain 10/40/100Gb Ethernet controller-related assets and non-exclusive licenses to certain intellectual property relating primarily to Broadcom’s programmable NetXtreme II Ethernet controller family.
“This transaction is a win-win for our customers. Broadcom is focusing internal Ethernet controller efforts on strengthening its end-to-end data center platform while establishing a long-term ASIC supply relationship with QLogic in support of NetXtreme II Ethernet controllers,” said Rajiv Ramaswami, Executive Vice President and General Manager of Broadcom’s Infrastructure and Networking Group. “This transaction enables customers to be served without disruption by a leading partner, allows Broadcom to provide a broader solution portfolio overall and creates value for our shareholders.”
The two companies will also begin a long-term supply agreement whereby Broadcom will become ASIC supplier to QLogic in support of the NetXtreme II product line. At the close of the deal QLogic will license certain Broadcom patents under a non-exclusive patent license agreement that will cover QLogic’s Fibre Channel products in exchange for a license fee of $62 million.
“We are pleased to enter into this partnership with Broadcom,” said Prasad Rampalli, President and Chief Executive Officer of QLogic. “QLogic gains world-class technology, an immediate presence serving enterprise customer Ethernet controller needs and an important long-term partnership to deliver end-to-end solutions. Going forward, this acquisition will form the foundation of our Ethernet controller business and accelerates our time-to-market with leading-edge technology.”