Broadcom Buys Into Microwave Backhaul

Broadcom Corp. (Nasdaq: BRCM) is moving into microwave backhaul, announcing Monday that it intends to buy Israeli chip company Provigent Inc. for a net $313 million (after accounting for Provigent's cash).

The deal, expected to close by June 30, would be mostly in cash, with a bit of Broadcom stock to be swapped for unvested employee stock options.

Why this matters
Microwave backhaul has been a hot topic lately, and the Provigent price tag certainly backs that up; the company had raised just $55 million, according to CEO Dan Charash.

It's also telling whenever Broadcom gets interested in a market; you could consider this official notice that microwave is cool. Microwave backhaul is an area where many big equipment providers make their own chips, which to Broadcom means it's an opportunity to go in with guns blazing.

In microwave backhaul, Broadcom especially sees a chance to make equipment cheaper -- an imperative, given that Long Term Evolution (LTE) deployments could include lots of small cells, meaning that much more backhaul gear has to get acquired. Chip integration is a specialty of Broadcom's, so the company hopes to produce more highly integrated chips, building on the systems-on-chip that Provigent already has.

For more
Here's a look at Provigent's funding history and the latest on microwave backhaul.

— Craig Matsumoto, West Coast Editor, Light Reading