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IRVINE, Calif. and BOSTON, Apr 7, 2004 /PRNewswire-FirstCall via COMTEX/ -- Broadcom Corporation (Nasdaq: BRCM), a leading provider of highly-integrated semiconductor solutions enabling broadband communications, today announced that it has acquired Sand Video, Inc., a privately-held, Andover, Mass.-based company focused on the development of advanced video compression semiconductor technology for a broad range of consumer digital video applications. Advanced video compression technology substantially increases the capacity of digital video and audio consumer electronic devices, which will enable equipment manufacturers and service providers to offer more services and features at lower prices to the consumer.
Sand Video™ products support existing MPEG-2 compression standards as well as the emerging ITU-T H.264 standard, also known as advanced video coding (AVC), or MPEG-4 Part 10, and will be supporting Microsoft's Windows Media® 9 compression and decompression standards in the future. The combination of technologies and products from Broadcom and Sand Video will enable Broadcom's customers to bring to market next-generation video solutions for a range of products, including digital TVs, enhanced cable and satellite TV set-top boxes, personal video recorders (PVRs), high definition DVD recorders and players, Internet Protocol (IP) set-top boxes, and video conferencing, among others. With Sand Video's Compression Advantage™ multi-standard compression chip products, Broadcom will be uniquely positioned to provide these markets with complete solutions.
Video compression algorithm technology has moved forward dramatically over the past several years, culminating in new emerging compression standards such as AVC and Windows Media 9. These standards can provide an over 50% reduction in the bit rate required to transmit a video signal. This improvement in turn will allow a cable or satellite operator to provide more channels and consumers to record more movies on their PVR set-top boxes.
"With the demand for high definition (HD) and video-on-demand content accelerating rapidly, the industry is looking beyond the current MPEG-2 standard to advanced compression technology that will significantly reduce the bit rate required to transmit broadcast-quality video," said Daniel A. Marotta, Group Vice President of Broadcom's Broadband Communications Group. "The acquisition of Sand Video and its advanced technology will allow us to offer customers more complete solutions that support all of the major existing and emerging video compression formats and enable customers to bring their products to market more rapidly."
"Moreover, Sand Video has assembled a unique team with world class expertise in semiconductor-based advanced compression and image processing technology, and a proven ability to conceive and develop products employing these technologies for customers worldwide," Mr. Marotta continued. "They are a great complement to our existing global digital video team, adding both depth and breadth to what is already an outstanding resource for Broadcom."
"With its broad product portfolio and market access, Broadcom is the ideal complement for Sand Video's growing reach into the consumer video segment," said Peter Besen, President and CEO of Sand Video. "Combining Broadcom's outstanding design experience with Sand Video's advanced silicon compression technology will create highly integrated silicon solutions that fill the demand for next-generation, feature-rich consumer electronic devices."
In connection with the acquisition, Broadcom will pay a total of up to approximately $77.5 million - $70.1 million in the form of 1.666 million shares of its Class A common stock issued or reserved for future issuance (valued at the NASDAQ National Market closing price on April 6) and $7.4 million in cash consideration -- in exchange for all outstanding shares of Sand Video capital stock and upon exercise of outstanding employee stock options and other rights of Sand Video. The cash consideration will be subject to escrow pursuant to the terms of the acquisition agreement. Broadcom expects to record a one-time charge for purchased in-process research and development expenses related to the acquisition in its second fiscal quarter, ending June 30. The amount of that charge has not yet been determined. This transaction will not draw upon the S-3 or S-4 shelf registration statements that Broadcom filed with the Securities and Exchange Commission in February 2004.
About Broadcom
Broadcom Corporation is a leading provider of highly integrated semiconductor solutions that enable broadband communications and networking of voice, video and data services. We design, develop and supply complete system-on-a-chip (SoC) solutions incorporating digital, analog and radio frequency (RF) technologies, as well as related hardware and software system-level applications. Our diverse product portfolio addresses every major broadband communications market and includes solutions for digital cable and satellite set-top boxes; high definition television (HDTV); cable and DSL modems and residential gateways; high-speed transmission and switching for local, metropolitan, wide area and storage networking; home and wireless networking; cellular and terrestrial wireless communications; Voice over Internet Protocol (VoIP) gateway and telephony systems; broadband network and security processors; and SystemI/O™ server solutions. These technologies and products support our core mission: Connecting everything®.
Broadcom is headquartered in Irvine, Calif., and may be contacted at 1-949-450-8700 or at www.broadcom.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
All statements included or incorporated by reference in this release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
Important factors that may cause such a difference for Broadcom in connection with the acquisition of Sand Video include, but are not limited to, the risks inherent in acquisitions of technologies and businesses, including the timing and successful completion of technology and product development through volume production, integration issues, costs and unanticipated expenditures, changing relationships with customers, suppliers and strategic partners, potential contractual, intellectual property or employment issues, accounting treatment and charges, and the risk that anticipated benefits of the acquisition may not be realized; general economic and political conditions and specific conditions in the markets we address, including the volatility in the technology sector and semiconductor industry, trends in the broadband communications markets in various geographic regions, and possible disruption in commercial activities related to terrorist activity or armed conflict in the United States and other locations; the rate at which our present and future customers and end-users adopt Broadcom's and Sand Video's technologies and products in the markets for consumer digital video applications; delays in the adoption and acceptance of industry standards in those markets; our ability to scale our operations in response to increases in demand for our products and services; competitive pressures and other factors such as the qualification, availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; the availability and pricing of third party semiconductor foundry and assembly capacity and raw materials; fluctuations in the manufacturing yields of our third party semiconductor foundries and other problems or delays in the fabrication, assembly, testing or delivery of our products; our ability to retain and hire key executives, technical personnel and other employees in the numbers, with the capabilities, and at the compensation levels needed to implement our business and product plans; the risks of producing products with new suppliers and at new fabrication and assembly facilities; the timing, rescheduling or cancellation of significant customer orders and our ability, as well as the ability of our customers, to manage inventory; the loss of a key customer; our ability to specify, develop or acquire, complete, introduce, market and transition to volume production new products and technologies in a timely manner; the timing of customer-industry qualification and certification of our products and the risks of non-qualification or non-certification; the volume of our product sales and pricing concessions on volume sales; the effects of new and emerging technologies; changes in our product or customer mix; intellectual property disputes and customer indemnification claims and other types of litigation risk; problems or delays that we may face in shifting our products to smaller geometry process technologies and in achieving higher levels of design integration; the quality of our products and any remediation costs; the effectiveness of our expense and product cost control and reduction efforts; the risks and uncertainties associated with our international operations, particularly in light of recent events; the effects of natural disasters, public health emergencies, international conflicts and other events beyond our control; the level of orders received that can be shipped in a fiscal quarter; and other factors.
Our Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss the foregoing risks as well as other important risk factors that could contribute to such differences or otherwise affect our business, results of operations and financial condition. The forward-looking statements in this release speak only as of this date. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.
Broadcom®, the pulse logo, Connecting everything®, Sand Video™, Compression Advantage™ and SystemI/O™ are trademarks of Broadcom Corporation and/or its affiliates in the United States and certain other countries. Windows Media® is a trademark of Microsoft Corporation. Any other trademarks or tradenames mentioned are the property of their respective owners.
Broadcom Trade Press Contact
Laura Brandlin
Director, Marketing Communications
949-926-5108
lbrandlin@broadcom.com
Broadcom Business Press Contact
Bill Blanning
Sr. Director, Corporate Communications
949-926-5555
blanning@broadcom.com
Broadcom Investor Relations Contact
T. Peter Andrew
Sr. Director, Investor Relations
949-926-5663
andrewtp@broadcom.com
SOURCE Broadcom Corporation
Trade Press, Laura Brandlin, Director, Marketing Communications, +1-949-926-5108, lbrandlin@broadcom.com, or Business Press, Bill Blanning, Sr. Director, Corporate Communications, +1-949-926-5555, blanning@broadcom.com, or Investor Relations, T. Peter Andrew, Sr. Director, Investor Relations, +1-949-926-5663, andrewtp@broadcom.com, all of Broadcom Corporation
http://www.broadcom.com
