(WEB HOST INDUSTRY REVIEW) — Expanding its product portfolio for data centers and large scale cloud computing environments, wired and wireless communications semiconductor developer Broadcom Corporation (www.broadcom.com) has signed a definitive agreement to acquire Dune Networks (www.dunenetworks.com), which develops switch fabric solutions for data center networking equipment.
“Dune’s massively scalable interconnect fabric, combined with our Ethernet products, augments our portfolio of solutions for data center networking equipment,” Broadcom vice president and network switching general manager Martin Lund said in a statement. “This technology is particularly well suited to meet the emerging requirements for cloud computing networks at a large scale, and will enable us to address new market applications for Ethernet in the data center.”
According to Broadcom’s announcement this week, Broadcom expects to pay approximately $178 million to acquire all of the outstanding shares of capital stock and Dune’s other rights. Excluding any purchase accounting related adjustments and fair value measurements, Broadcom expects its acquisition of Dune will be neutral to slightly accretive to earnings per share in 2010. The boards of directors of both companies have approved the merger, and the closing is expected to occur by the end of Broadcom’s first quarter ending March 31, 2010, subject to customary closing conditions.
Dune will bring highly scalable switch fabric technology to Broadcom, which will help it meet the needs of data centers that are delivering significantly more bandwidth to meet the requirements of cloud computing and other real-time services over the Internet. Dune’s scalable chipset supports bandwidth speeds of up to 100Gbps per port and can connect more than ten thousand servers in a single deployment.
“Dune Networks’ distributed connection fabric is a complement to Broadcom’s existing product suite,” Dune chief executive officer Eyal Dagan said in a statement. “Our joint customers will be able to bring to market low cost, high performance data center switching that will enable end users to build next-generation cloud computing networks.”
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