Cypress Semiconductor and Broadcom have signed a definitive agreement under which Cypress will acquire Broadcom’s Wireless Internet of Things (IoT) business and related assets in an all-cash transaction valued at $550 million. Under the terms of the deal, Cypress will acquire Broadcom’s Wi-Fi, Bluetooth and ZigBee IoT product lines and intellectual property, along with its WICED brand and developer ecosystem. Broadcom’s IoT business unit, employs approximately 430 people worldwide and generated $189 million in revenue during the last twelve months. The acquisition will strengthen Cypress’s position in key embedded systems markets, such as automotive and industrial, and will establish them as a leader in the high-growth consumer IoT market, a segment that includes wearable electronics and home automation solutions.
This transaction, which has been approved by the board of directors of Cypress and Broadcom, is expected to close in the third calendar quarter of 2016, subject to customary conditions and regulatory approvals. Cypress expects the transaction to be accretive within a year of closing and will improve its gross margin, earnings and long-term revenue potential.
Under the terms of the deal, Broadcom will continue to focus on its wireless connectivity solutions for the access and mobility segments that are not IoT related, including serving set-top box, wireless access, smartphone, laptop and notebook customers. Cypress will capitalize on the rapidly growing Wi-Fi and Bluetooth connectivity (17% per year) markets in consumer, industrial and automotive IoT segments.
