Broadcom Corp. Monday continued with its aggressive growth strategy by
acquiring ServerWorks in a stock deal valued at $957 million.
Broadcom’s products enable the high-speed transmission of voice, video
and data over existing communications infrastructures. ServerWorks Corp., an
independent supplier of high-performance system input/output (I/O)
integrated circuits for servers, develops conduits for delivering
high-bandwidth data in and out of servers.
The addition of ServerWorks’ product portfolio will enable Broadcom to
deploy wire-speed 10 Gigabit per second (Gbps) communications topologies
such as InfiniBand, Ethernet and Fiber Channel into server and storage
platforms, according to Dr. Henry T. Nicholas III, president and CEO of
” “This acquisition is very strategic to our mission of delivering
end-to-end broadband solutions for higher-speed Internet and e-business
connectivity,” he said. “ServerWorks’ will enable Broadcom to enhance the
entire Internet and Intranet infrastructure.
“Broadcom’s networking technology in combination with ServerWorks’ SystemI/O
solutions will alleviate the congestion occurring both to and within the
servers and storage devices through which all forms of Internet traffic
pass,” he added. “This has the potential to affect every ‘click’ of every
Internet user — worldwide — by speeding up the response time of endpoint
server and storage devices.”
In connection with the acquisition, Broadcom will issue approximately 11
million shares of its Class A common stock in exchange for all outstanding
shares of ServerWorks common stock and upon exercise of outstanding employee
stock options, warrants and other rights of ServerWorks.
Up to approximately 9 million additional shares of Broadcom Class A
common stock will be reserved for future issuance to the stockholders and
option and warrant holders of ServerWorks upon satisfaction of certain
performance goals. The merger transaction is expected to close within 60
Upon completion of the acquisition, Raju Vegesna, president and CEO of
ServerWorks, will become vice president and general manager of Broadcom’s
ServerWorks Business Unit, which will operate as a wholly owned Broadcom
subsidiary based in Santa Clara.
Last Friday the Broadcom completed its acquisition of VisionTech Ltd., an
Israeli-based provider of integrated circuits, creating the core of Broadcom
Israel. In December, Broadcom purchased SiByte Inc., a developer of
high-performance, highly integrated processor chips for networking and
The company stock
was trading at $87 per share this