Cypress to acquire Broadcom's IoT operations for $550m
Picture credit: Broadcom
Cypress Semiconductor has announced the acquisition of Broadcom’s IoT business unit for $550 million (£376m) in cash.
The IoT arm of the network and semiconductor provider employs close to 430 people globally and brought in $189m in revenue during the past 12 months. As part of the agreement, Cypress will acquire Broadcom's Wi-Fi, Bluetooth and ZigBee IoT product lines and intellectual property, along with its WICED brand and developer ecosystem.
The transaction, which has been approved by the board of directors of Cypress and Broadcom, is expected to close in the third calendar quarter of 2016, subject to customary conditions and regulatory approvals. Cypress expects the transaction to be accretive within a year of closing and to improve its gross margin, earnings and long-term revenue potential.
The acquisition boosts Cypress's offering key embedded systems markets, such as automotive and industrial and puts it in a favourable position in the high-growth consumer IoT market. The agreement will also ensure Broadcom only focuses on its wireless connectivity solutions for the access and mobility segments that are not IoT related.
Cypress president and CEO, T.J. Rodgers, said: “The robust, ready-to-scale WICED brand and developer network of module makers, value-added resellers (VARs), technology partners and ODMs who are already working with its technology will give us immediate revenue growth capability in new channels.
“Cypress will continue to support and grow this network and to provide it with future generations of innovative, disruptive connected products,” Rodgers added. “Cypress will also bring these new technologies to the automotive market, where we are already number three worldwide in microcontrollers and memories, and where the connected car boom has just started.”
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