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Broadcom to Acquire Mobilink

Technology: Irvine chip maker enters the mobile phone market with the $190-million stock buy.


Broadcom Corp., the Orange County chip maker known for its aggressive acquisition strategy, said Monday it plans to jump into the cell-phone market with a $190-million stock purchase of privately held Mobilink Telecom Inc.

Mobilink designs chipsets and develops technical blueprints for a variety of wireless devices, including mobile phones, personal digital assistants and cellular modem cards.

The company sells its software designs and products to many of the major phone companies.

Irvine-based Broadcom said it will issue about 5.6 million shares to buy Santa Clara-based Mobilink. Broadcom also will take an undetermined charge in the second quarter because of research and development costs related to the acquisition.

The deal is expected to close before the end of June.

Broadcom also said it has set aside an additional 2 million shares if Mobilink meets certain performance levels.

Company officials declined to elaborate.

Mobilink Telecom, which was founded in 1996 and has 132 employees, had revenue of about $13million last year, according to Chairman and Chief Executive Tung Chang.

No layoffs are expected.

Broadcom, which was once the fastest-growing chip company and known for acquiring 18 companies during a two-year period, has seen its stock price slump as the high-tech boom has gone bust.

Broadcom shares, which have declined about 7% this year, rose $1.29 on Monday to close at $33.89 on Nasdaq.


Reuters was used in compiling this report.

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