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Marvell Taking Over RADLAN

Broadband circuit designer Marvell Thursday inked a deal to acquire RADLAN Computer Communications for $49.7 million in cash and shares.

The boards of directors of both companies have approved the merger, which is expected to resolve in about 60 days.

Based in Santa Clara, Calif. with offices in Israel, RADLAN makes embedded networking software. The company was founded in 1998 as a spin-off from RND, which was founded by brothers Yehuda and Zohar Zisapel. RND was also the product of a spin-off, from the Zisapel brothers' RAD Group. Eventually, RND was split into two companies - Radware .

Sunnyvale-based Marvell said it would incorporate its mixed-signal ICs with RADLAN's networking infrastructure drivers, interfaces and software modules to make improved networking communications products like routers. Currently, Marvell's product lineup includes read channels (which convert analog data from a magnetic disk into digital data for computing), preamplifiers, and Ethernet switch controllers and transceivers. The company draws most of its sales from a handful of customers, including Samsung, Seagate Technology, Toshiba, Fujitsu, and Hitachi.

Company execs say the addition of RADLAN may expand that list to help it compete with rivals Agere Systems , STMicroelectronics and Texas Instruments .

"After many years of working together, we are excited to merge our team of top communications software experts with Marvell," said RADLAN president and CEO Jacob Zankel. "This acquisition brings together complementary technologies, enabling Marvell to provide RADLAN's OpENS infrastructure software across all of its communications products to address the enterprise, access, wireless, and SAN markets."

As part of the deal, Marvell (which currently owns 9 percent of RADLAN) said would take over the remaining outstanding shares of RADLAN capital stock and employee stock options. Up to approximately 1.0 million additional shares of Marvell common stock will be reserved for future issuance if the company meets some sales goals. Additionally, Marvell said it would issue 0.5 million warrants to RADLAN's shareholders exercisable at $18.41.