Broadcom will divest certain 10/40/100Gb Ethernet controller-related assets and non-exclusive licenses to certain intellectual property relating primarily to Broadcom’s programmable NetXtreme II Ethernet controller family to QLogic Corporation for $147 million.
In connection with the transaction, Broadcom and QLogic will enter into a long-term supply agreement whereby Broadcom will become ASIC supplier to QLogic in support of the NetXtreme II product line.
The transaction will enable Broadcom to focus on internal Ethernet controller efforts on strengthening its data center platform while establishing a ASIC supply relationship with QLogic in support of NetXtreme II Ethernet controllers.
Rajiv Ramaswami, executive vice president and general manager of Broadcom’s Infrastructure and Networking Group, said: “This transaction enables customers to be served without disruption by a leading partner, allows Broadcom to provide a broader solution portfolio overall and creates value for our shareholders.”
Prasad Rampalli, president and chief executive officer of QLogic, said that this acquisition will form the foundation of its Ethernet controller business and accelerates its time-to-market.
Concurrent with the closing, it is expected QLogic will license certain Broadcom patents under a non-exclusive patent license agreement that will cover QLogic’s Fibre Channel products in exchange for a license fee of $62 million.