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Broadcom to buy NetLogic

September 13, 2011

Broadcom is to buy NetLogic for about $3.7 billion to expand its line-up of chips used in wireless network equipment to take advantage of growing demand for mobile data services.

The $50-per-share deal, which represents a premium of 57 per cent over NetLogic’s Friday close of $31.91, sent NetLogic’s shares soaring 50 per cent.

Broadcom Chief Executive Scott McGregor defended the premium, noting that NetLogic would bring faster profit and revenue growth and that the addition of the products to Broadcom’s lineup would double the size of the network equipment market it can go after to about $12 billion by 2015.

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