Broadcom Leads Network Communications Processor Market with Acquisition of NetLogic Microsystems

- Providing a seamless end-to-end network infrastructure platform through corporate mergers

September 21, 2011 – Broadcom, a global leader in wired and wireless communications semiconductors, announced today that it has entered into a merger agreement with NetLogic Microsystems (hereinafter NetLogic), a leader in wired and wireless communications semiconductor solutions. With an acquisition price of $50 per share, Broadcom is acquiring NetLogic for approximately $3.7 billion.

Through this acquisition, Broadcom plans to expand its infrastructure portfolio with key industry-leading new product families and technologies, including knowledge-based processors, multi-core embedded processors, and digital front-end processors. Broadcom expects this merger to help accelerate time-to-market and reduce development costs, while providing customers with a best-in-class integrated network infrastructure platform.

The boards of directors of both companies have agreed to this merger, subject to the terms and conditions of the agreement, including domestic and international regulatory approvals and the approval of NetLogic shareholders. The process for this acquisition is expected to be fully completed in the first half of 2012, and Broadcom is expected to acquire it for approximately US$0.10 in non-GAAP 2012.

Scott McGregor, President and CEO of Broadcom, stated, “This acquisition will provide significant benefits to Broadcom shareholders by bringing about substantial financial growth as well as cutting-edge technology that aligns with Broadcom’s strategy.” He added, “By acquiring NetLogic Microsystems, Broadcom gains key elements for building next-generation infrastructure, including multi-core embedded processor solutions, market-leading pointer-based processors, and digital front-end technology for wireless base stations.” “Through this, Broadcom has been able to realize the construction of a platform for the end-to-end integrated communications and network infrastructure that customers desire,” he said.

Furthermore, Scott McGregor, President and CEO of Broadcom, added, “This merger aligns with Broadcom’s strategic portfolio review and focuses on creating value through capital allocation, as well as providing the best platform to customers in the rapidly growing sectors of the telecommunications industry.”

Ron Jankov, President and CEO of NetLogic Microsystems, stated, “This merger will benefit customers, shareholders, and NetLogic Microsystems employees alike. NetLogic’s industry-leading product portfolio will benefit significantly from access to Broadcom’s extensive range of cutting-edge technologies, tools, resources, and ecosystem, enabling both companies to deliver a fully integrated platform for customers’ next-generation designs. Furthermore, NetLogic employees look forward to a close cultural alignment with Broadcom, as well as the opportunity to join a vibrant organization focused on outstanding engineering and innovation.”

In addition, Broadcom reiterated its business outlook for the third quarter of 2011. Broadcom expects revenue of between US$1.9 billion and US$2 billion for the third quarter of 2011, as previously announced, and anticipates a slight increase in gross margins on products under generally accepted accounting principles (GAAP) from the fixed amount. Furthermore, it expects R&D, selling, general, and administrative expenses under GAP to decrease by US$10 million from the fixed amount. Broadcom expects to hold approximately US$4.2 billion in cash and cash equivalents by the end of the third quarter, an increase of about US$3.8 billion from the previous quarter.

Both companies will hold conference calls with analysts and investors to discuss Broadcom's proposed acquisition of NetLogic. Both companies plan to broadcast this via an internet webcast. To listen to the webcast, visit the investor sites on the Broadcom and NetLogic websites at www.broadcom.com/investors or investors.netlogicmicro.com. The webcast will be available for recording and playback until 10:00 PM Pacific Standard Time on October 12.