Broadcom Pays $47.5M for NFC Company
Chipmaker Broadcom says it will pay $47.5 million for Britain-based near-field communication (NFC) company Innovision Research and Technology.
The deal, conducted through company subsidiary Broadcom International, represents an 84 percent premium over the Innovision’s closing price yesterday and the company’s investors will get 52 cents in cash per share owned. Broadcom expects the deal to close in the third quarter of this year.
Innovision sells the intellectual property rights for NFC and RFID chips used in cell phones and consumer electronics. The company has struggled to achieve profitability and has posted annual losses every year since 2006. For the year ended March 31, 2010, Innovision lost $2.97 million on sales of $3.49 million.
In an annual report filed yesterday, the company said it had been approached by a “major semiconductor company regarding a cash offer for the entire share capital of the company.”
“Taking into consideration the price on offer, our future funding requirements and the risks associated with the available strategic options, we have recommended that shareholders should accept the offer for the reasons set out in the announcement made in respect to the offer,” Innovision said in its annual report.
Innovision’s stock soared by 14.5 British Pounds sterling ($21.40) on news of the acquisition in trading on the London Stock Exchange Alternative Investment Market.
Broadcom’s stock held steady in morning trading on NASDAQ, rising just one cent to $35.51.