NetLogic Microsystems Acquires Aeluros Inc.

Wednesday October 16, 11:10:52

NetLogic Microsystems, Inc. [NASDAQ: NETL], the leader in the design and development of knowledge-based processors, today announced it has signed a definitive agreement to acquire Aeluros, Inc., a privately-held, fabless provider of industry-leading 10-Gigabit Interface technologies and semiconductor products.  Low-power, multi-gigabit interface technology is an increasingly important component in driving next-generation knowledge-based processors, as well as in enabling 10-Gigabit Ethernet (10GE) physical layer (PHY) connectivity for enterprise and datacenter networks.

Since its founding in 2001, the Aeluros team has delivered significant innovation to the performance, functionality and low-power operation of 10GE PHY technology.  This leadership in 10GE PHY technology has led to Aeluros’ products being designed into numerous next-generation systems at leading networking OEMs and optical module manufacturers.

Through the acquisition, NetLogic Microsystems also expects to expand its worldwide leadership in knowledge-based processors by delivering next-generation processors that incorporate the industry’s best-in-class, ultra low power interface technology from Aeluros.  Leading original equipment manufacturers (OEMs) are driving the requirements for higher speed interfaces at lower power and lower cost to support bandwidth-hungry video applications in the enterprise and datacenter.  NetLogic Microsystems expects the acquisition of Aeluros to raise the bar of innovation for the industry and to accelerate its next-generation knowledge-based processor roadmap.

“We are very excited to have such a very strong and proven team join NetLogic Microsystems.  Aeluros will provide us with a strong leadership position in interface technology for our next-generation knowledge-based processors, and will complement our team and product portfolio with their advanced portfolio of 10GE products,” said Ron Jankov, president and CEO of NetLogic Microsystems.  “We believe this synergistic combination will allow us to continue to deliver highly compelling products to our customers and partners.”

Aeluros is headquartered in Mountain View, Calif., and comprises one of the industry’s most experienced team of high-caliber analog engineers.  The team’s expertise in developing low-power 10-Gigabit interface technology in mainstream CMOS process is a compelling differentiator, and represents a scarce engineering talent that will form the center of excellence in high-speed interface technology for NetLogic Microsystems.

“Aeluros’ leadership in high-speed interface technology is very complementary with NetLogic Microsystems’ leadership in knowledge-based processing,” said Stefanos Sidiropoulos, CEO of Aeluros.  “The combination will enable us to deliver best-in-class interface technology for next-generation knowledge-based processors as well as to enhance the market success of Aeluros’ 10GE physical layer products and our ability to serve our customers.”

Aeluros’ existing 10GE physical layer products are expected to benefit from the same market drivers as for NetLogic Microsystems’ knowledge-based processors.  These include the growth in 10-Gigabit Ethernet ports in switches and routers for the enterprise,  the upgrade of the telecom infrastructure to support Internet Protocol Television (IPTV),  and the new 10GE IP-backbone for advanced mobile wireless and application-aware networking.

NetLogic Microsystems expects to pay $57 million in cash upon the closing of the transaction in exchange for all of the outstanding equity securities of Aeluros.  NetLogic Microsystems will reserve approximately 115,000 shares of common stock for future issuance upon the exercise of unvested employee stock options of Aeluros that will be assumed by NetLogic Microsystems and will be subject to continued employment vesting requirements.  In addition, under the terms of the definitive agreement, NetLogic Microsystems may pay up to an additional $20 million upon the attainment of performance milestones for the acquired business.  A portion of the consideration payable to the stockholders of Aeluros will be placed into escrow pursuant to the terms of the definitive agreement.  The acquisition has been approved by both companies’ Board of Directors and is subject to customary closing conditions.  The acquisition is expected to close within the next 10 days.