Cypress buys Broadcom’s wireless IoT business
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, which employs approximately 430 people worldwide, generated $189 million in revenue during the last twelve months. The acquisition strengthens Cypress’s position in key embedded systems markets, such as automotive and industrial, and establishes it as a leader in the high-growth consumer IoT market, a segment that includes wearable electronics and home automation solutions.
The 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 to improve its gross margin, earnings and long-term revenue potential.
“Cypress is a significant player in the IoT today because of our ultra-low-power PSoC programmable system-on-chip technology, but we’ve only been able to pair it with generic radios so far. Now we have the highly regarded Broadcom IoT business — state-of-the-art Wi-Fi, Bluetooth and Zigbee RF technologies — that will transform us into a force in IoT and provide us with new market opportunities as well,” Cypress President and CEO T.J. Rodgers said in a statement. “What we bring to the party is over 30,000 customers worldwide who need advanced, ultra-low-power wireless communication but only can absorb it in the form of an easy-to-use programmable embedded system solution.”
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 markets in consumer, industrial and automotive IoT segments.
www.cypress.com
www.broadcom.com
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