Boston, MA 06/06/2014 (wallstreetpr) – Broadcom Corporation (NASDAQ:BRCM) acquired the business unit of its own home-grown company Ittiam Systems in a deal whose value was not disclosed. The deal, it is found, was inked long back in April 2013 and as a part of the deal, 32 engineers who earlier belonged to Ittiam Systems would now become a part of Broadcom Corporation.
About the Deal
The overall value of this deal depends on the number of customers that Broadcom Corporation (NASDAQ:BRCM) can manage to grab with the IP. The amount of the deal will also include the total cost of human capital.
Ittiam’s Position and Benefit to Broadcom
Ittiam explains that the IP of the company is embedded in millions of devices of Wi-Fi chipsets, smartphones, video communication devices as well as tablets. Founded by Srini Rajam in the year 2001, Ittiam raised a total of $11.5 million from Banc of America Equity Partners as well as Global Technology Ventures in Bangalore. Broadcom Corporation (NASDAQ:BRCM) also had a vital role to play in not just video communications but also Wi-Fi technologies. Ittiam sold the business unit to BRCM primarily because it now wants to focus on video communication technologies. The business unit which is bought by BRCM specialised mainly in improving the data transfer rates in Wi-Fi protocols.
It is important to note that the news of Broadcom buying the business unit of Ittiam came at a time when the former announced that it was planning to exit the cellular baseband business so that it could save $700 million on a yearly basis. Broadcom Corporation (NASDAQ:BRCM) was already losing its market share to MediaTek in context with the chips which are embedded in less expensive and low-end smartphones. It is quite difficult to project and market the technology IPs from India, but over the past few years, MNCs understand the fact that India has the capability to build the IPs like these.
