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Broadcom Acquires BroadLight

April 10, 2012

Author: Jag Bolaria

On April 5, Broadcom announced it had completed its acquisition of BroadLight. Broadcom paid about $195 million in cash and may pay up to $10 million in the future if certain performance goals are met. BroadLight was founded in 2000 and had raised $62 million along with taking out an unspecified amount in loans. We estimate BroadLight had revenue of $52 million in 2011 and a staff of about 100 people, all of whom were expected to join Broadcom.

Behind Broadcom and PMC-Sierra, BroadLight was the third largest supplier of PON interface chips and the leading supplier of GPON components. The company was the technology and market leader for BPON and its successor, GPON. Its products include GPON gateway processors for the client side and controllers for carrier-switching equipment. Recently, BroadLight had proliferated its product line with embedded processors, which are based on NPU technology developed for the company’s GPON products.

Interestingly, Broadcom already had competing GPON interface components for the customer premises. Broadcom’s GPON products may use technology licensed from Alcatel, limiting the company’s ability to target the broader GPON market. By acquiring BroadLight, Broadcom becomes the leader for GPON shipments as well as being the overall PON leader. With future PON growth driven by GPON deployments in China, the US, and emerging economies, this acquisition should produce good returns for Broadcom.

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