Conexant buys Globespan Virata's MPEG businessRichard
Wilson
Conexant Systems has acquired the video compression chip business
of Globespan Virata’s for approximately $21m in cash and 1.25
million shares of Conexant stock.
According to Conexant, the significance of the deal is that it will
boost its own development of MPEG video products for encoder
markets including multimedia PCs and cable TV set-top boxes.
“This strategic acquisition enhances our portfolio by adding
advanced digital media compression technologies that are critical
to our long-term product roadmap in digital video markets,” said F.
Matthew Rhodes, president of Conexant’s broadband communications
business unit.
Globespan Virata’s 45 person MPEG compression technology team will
move to Conexant but will continue to be located in San Jose,
California.
Globespan Virata is a broad-based comms semiconductor developer
which was formed last October with the merger of US firm Globespan
and UK company Virata.
The merged company, which is based in the US, has made a point of
focusing on the xDSL market and has annual sales of over $500m. The
video compression business was only a small part of its
activities.
Following the deal, additional contingent payments will also be
made by Conexant to GlobespanVirata based on the future performance
of both the video business and Conexant’s stock.