QLogic Corp. has entered a deal with Broadcom Corp. to acquire certain Ethernet assets and non-exclusive licenses related to the technology for $147 million cash, the Aliso-Viejo company announced after the close of trading Tuesday.
The deal calls for the Irvine-based chipmaker to become a long-term supplier to QLogic for what’s known as ASIC chips, or application-specific integrated circuits, which are customized for a specific use.
The transaction is expected to close by April.
QLogic makes switches, adapter cards and other electronics used for data, storage and server networks.
Broadcom expects the deal to “slightly” boost earnings this year, while QLogic projects a more immediate bump in profits, the companies said.
QLogic is expected to license Broadcom patents to support its ongoing Fibre-Channel products lineup for a fee of $62 million.
The transaction has been approved by the boards of directors of Broadcom and QLogic.
QLogic shares are up slightly in afterhours trading to a market value of about $995.6 million.
Broadcom shares were flat, closing the intraday trading session with a market value of about $18.1 billion.
