Cypress Semiconductor has agreed to acquire Broadcom 's Wireless Internet of Things (IoT) business and related assets in an all-cash transaction valued at USD 550 million. Under the terms of the deal, Cypress will buy Broadcom's Wi-Fi, Bluetooth and Zigbee IoT product lines and intellectual property, along with its WICED brand and developer ecosystem.
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.
Broadcom's IoT business unit, which employs around 430 people worldwide, generated USD 189 million in revenue during the last twelve months.
Cypress said the deal will strengthen its 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 this year, 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.
