A New Powerhouse in the DSL Space
Integrated circuit, software and system design company GlobeSpan Inc. is acquiring communications software and semiconductor maker Virata Corp. in a $1.3 billion deal that is expected to create a DSL powerhouse.
The companies said they "share a vision to create the premier communications semiconductor company."
Red Bank, N.J.-based GlobeSpan
Shareholders of Santa Clara, Calif.-based Virata
After the merger is completed, on a fully diluted basis, GlobeSpan stockholders will own approximately 52.5 percent of the combined company.
The companies said they expect the transaction to generate annual synergies of $30 million to $35 million beginning in the first full year following completion of the transaction.
GlobeSpan was down 50 cents to $8.54 shortly after the opening bell today. Virata was down $1.48 to $8.50.
Armando Geday, president and CEO of GlobeSpan, will be chief executive officer of the combined company. Charles Cotton, Virata, CEO, will be executive chairman of the combined company.
said the all-stock deal will create a new company in the Digital Subscriber Line solutions space to be called GlobeSpan Virata, which will have pro forma revenues of $528 million for the 12 months ended June 30, 2001.
will receive 1.02 shares of GlobeSpan common stock for each share they own.