Avago Technologies announced a definitive agreement to acquire Emulex, a provider of integrated circuits for network connectivity, monitoring and management, for USD 606 million. Under the terms of the agreement, which has been approved by the boards of both companies, a subsidiary of Avago will make a bid of USD 8 per share cash for all of Emulex's shares. Avago expects to fund the transaction with cash available on its balance sheet.
Avago said that Emulex's connectivity business fits well with Avago's existing portfolio serving the enterprise storage market. Emulex said it should benefit from Avago's capabilities to help accelerate its strategy to support next-generation server and storage architectures.
Senior members of the Emulex management team and all of the directors of Emulex, collectively owning approximately 2.5 percent of Emulex's shares, have said they will support the bid. Pending regulatory approval, the takeover is expected to close in the second half of Avago's fiscal year ending 01 November.
