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Broadcom to Acquire Zyray for $98 Million

June 17, 2004|From Bloomberg News

Broadcom Corp., a maker of microchips for consumer electronics and computer networks, agreed to buy Zyray Wireless Inc., a developer of semiconductors for mobile phones, for $97.7 million in stock.

Broadcom, based in Irvine, said it would issue 2.23 million shares and forgive a previous $3-million investment in convertible notes issued by Zyray.

Zyray's chips help manufacturers add functions such as video and access to news to cellphones, Broadcom said. Closely held Zyray is Broadcom's fourth acquisition this year, said spokesman Henry Rael. Undetermined costs associated with the purchase will be taken in the third quarter, he said.

"This rounds out their offerings and positions Broadcom for a foray into cellphones with very advanced features," said Richard Whittington, an analyst at Caris & Co. in New York. Whittington rates the shares "buy" and does not own any, he said.

San Diego-based Zyray has 40 employees and Broadcom, which has 2,876 workers worldwide, doesn't expect any firings to result from the acquisition, Rael said.

Broadcom's customers include Hewlett-Packard Co., Cisco Systems Inc. and Motorola Inc.

The firm's competitors include Conexant Systems Inc., Texas Instruments Inc. and Marvell Technology Group Ltd.

Broadcom's shares rose 98 cents to $43.82 on Nasdaq. They have gained 29% this year.

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