Expected to Accelerate LTE Revenue into Early 2014 with Carrier-Validated, Production-Ready SoC
IRVINE, Calif.-- Sep. 4, 2013 -- Broadcom Corporation (NASDAQ: BRCM), a global innovation leader in semiconductor solutions for wired and wireless communications, today announced a definitive agreement to acquire LTE-related assets from affiliates of Renesas Electronics Corporation. The acquisition is expected to accelerate availability of Broadcom’s first multimode, carrier-validated LTE SoC platform into early 2014. For additional slide material visit the investor section of Broadcom’s website at www.broadcom.com/investors.
Broadcom is gaining a dual-core LTE SoC that is ready for volume production and is carrier-validated by leading global operators in North America, Japan and Europe. Broadcom also receives high-quality multimode, multiband, LTE-A/HSPA+/EDGE modem IP that includes support for leading-edge features such as Carrier Aggregation and VoLTE. The acquisition adds quality patents and applications to Broadcom’s IP portfolio and brings some of the world’s most experienced cellular engineers to Broadcom.
“Today’s transaction firmly establishes Broadcom’s presence in the rapidly growing LTE market with a production-ready, carrier-validated SoC,” said Scott McGregor, President and CEO of Broadcom. “Our LTE platform will leverage Broadcom’s rich connectivity portfolio and will deliver an optimized feature set for this fast growing market.”
In connection with the acquisition, Broadcom expects to pay approximately $164 million in cash. Excluding any purchase accounting related adjustments and fair value measurements, Broadcom currently expects this transaction to be dilutive to earnings per share on a non-GAAP basis by approximately $0.12 in the three months ending December 31, 2013 and dilutive to non-GAAP earnings per share by $0.10-$0.15 in full year 2014. However, Broadcom currently expects the transaction to be roughly neutral to non-GAAP earnings per share by the second half of 2014 and is expected to be accretive to non-GAAP earnings per share in 2015. The financial impact of the acquisition is presented on a non-GAAP basis, as GAAP acquisition-related charges, including, but not limited to, amortization of purchased intangible assets and potential restructuring charges, are not estimable at this time. The transaction has been approved by Broadcom and Renesas Electronics’s boards of directors, is subject to customary closing conditions, and is expected to close early in the three months ending December 31, 2013.
Updated Business Outlook
Broadcom today also updated its business outlook for the three months ending September 30, 2013. Broadcom now expects revenue between $2.075 billion and $2.175 billion; GAAP and non-GAAP product gross margins to be up roughly 50 to 100 basis points; and GAAP and non-GAAP research and development, and selling, general and administrative expenses to be somewhat above the high-end of the previously guided range of down ~$5 million to up ~$15 million and flat to up ~$20 million, respectively.
Conference Call Information
Broadcom will host a conference call for analysts and investors today at 4:30 a.m. Pacific Time (7:30 a.m. Eastern Time). Interested parties can call toll free at (800) 446-2782 US Toll Free or (847) 413-3235 US Toll. The company will broadcast the conference call via webcast over the Internet and will post additional slide materials about this acquisition on the company’s website. To listen to the webcast, or to view the slide content, please visit the Investors section of the Broadcom website at www.broadcom.com/investors. The webcast will be recorded and available for replay until 10:00 p.m. Pacific Time on October 4, 2013.
Broadcom Corporation (NASDAQ: BRCM), a FORTUNE 500® company, is a global leader and innovator in semiconductor solutions for wired and wireless communications. Broadcom® products seamlessly deliver voice, video, data and multimedia connectivity in the home, office and mobile environments. With the industry’s broadest portfolio of state-of-the-art system-on-a-chip and embedded software solutions, Broadcom is changing the world by Connecting everything®. For more information, go to www.broadcom.com.