Conexant buys Globespan Virata's MPEG businessRichard WilsonConexant 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.