Broadcom's Bluetooth Deal

Chip maker Broadcom Corp. (Nasdaq: BRCM) has stumped up $49 million for Widcomm Inc. in order to bolster its Bluetooth profile.

Widcomm's software defines how Bluetooth (1 Mbit/s over 2.4GHz) devices wirelessly "talk" to each other and perform different types of data transfers.

The firm, which was started in June 1998, has developed a number of software profiles that are implemented at the chipset and describe so-called "upper-level" actions like how a Bluetooth-enabled phone passes a user's business card data over a short-range wireless link to a notebook computer.

"They have the most extensive and widely used set of profiles in the industry," claims Scott Bibaud, director of marketing for the Bluetooth business unit at Broadcom. The Widcomm profiles are estimated to be used in more than 50 percent of Bluetooth PC designs.

Bibaud says Broadcom has already adopted Widcomm's profiles with its products, so further integration should be simple.

It has been a while since there was a flurry of large silicon players buying smaller rivals for the software know-how. Intel Corp. (Nasdaq: INTC) bought Trillium for its comms protocols software for $300 million in 2000. Conexant Systems Inc. (Nasdaq: CNXT) bought Netplane the same year. Although Intel ended up selling Trillium to Continuous Computing Corp. (CCPU) in 2003.

Broadcom will use around 1.23 million of its shares to pay for the deal. Bibaud says the firm may also pay up to $3 million to finance the acquisition, which is expected to close in two weeks.

Bibaud expects to keep on "virtually all" of the 57 employees at the San Diego-based Widcomm. That works out to a little less than $1 million per employee, for those not too good at math.

— Dan Jones, Site Editor, Unstrung

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