Broadcom Corporation, a global leader in semiconductors for wired and wireless communications, announced that it has completed the acquisition of Global Locate, Inc., a privately-held, fabless provider of industry-leading global positioning system (GPS) and assisted GPS (A-GPS) semiconductor products and software.
GPS products and location based services (LBS) are increasing in popularity with consumers and cellular service providers as both take advantage of the ability to identify exact geographical location by means of faint radio signals transmitted from a system of orbiting satellites. Growing consumer interest in these applications is driving the GPS chip market, which is expected to grow to $1.07 billion annually by 2012 according to market research firm Forward Concepts.
Combining Global Locate’s GPS technology with Broadcom’s leading Bluetooth, Wi-Fi, cellular and other mobile technologies will provide leading handset makers with wireless connectivity solutions that add significant value to feature and smart phone products.
In connection with the acquisition, Broadcom paid approximately $143 million in cash in exchange for all outstanding shares of capital stock and other rights of Global Locate. A portion of the consideration payable to the stockholders of Global Locate was placed into escrow pursuant to the terms of the acquisition agreement.
Additional consideration of up to $80 million in cash will be reserved for future payment to the former holders of Global Locate capital stock and other rights upon satisfaction of certain future performance goals. In connection with the transaction, certain former stockholders of Global Locate are purchasing $3 million of restricted shares of Broadcom’s Class.
A common stock at today’s closing price on the Nasdaq Global Select Market. Broadcom may record a one-time charge for purchased in-process research and development expenses related to the acquisition in its current fiscal quarter, ending September 30. The amount of that charge, if any, has not yet been determined.
