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Qualcomm buys Ikanos for $47m to extend connected home offering

Steve Rogerson
August 12, 2015
Qualcomm Atheros is set to acquire fellow California-based company Ikanos Communications, a broadband networking semiconductor and software provider, for about $47m. The move will give Qualcomm access to Ikanos’ central office and home gateway products.
The acquisition is intended to expand Qualcomm’s footprint in the carrier fixed line segment with the addition of high performance broadband access and modem technologies critical to enhancing users’ connected experiences in the home. The home gateway could extend Qualcomm Atheros’ leadership in carrier Wifi and wired connectivity, while providing a central hub for IoT enabled devices, services and 3G and LTE small cells.
“Qualcomm Atheros has always viewed the home gateway as the enabler for consumers to not only access the internet for browsing and downloading content and video streaming, but also as the hub of the internet in the home for a variety of reliable and high quality services,” said Rahul Patel, senior vice president and general manager at Qualcomm Technologies. “The combination of Qualcomm Atheros’ broad home gateway IP portfolio, including Wifi, powerline, small cell and Ethernet switch technologies, and Ikanos’ advanced wired modem technology, is designed to create a complete solution for a wide range of home gateway products to better serve the carrier segment.”
The acquisition provides Qualcomm access to a wide array of technologies, including A/VDSL2 and modem technology and chipsets for consumer premises equipment and central office infrastructure. Ikanos also has multi-mode gateway processor and accelerator technology for fibre, LTE, Ethernet and hybrid-copper applications. In addition, Ikanos InSight software allows remote diagnosis, management and optimisation of the broadband connection and quality-of-service, and voice over IP integrated access devices and bridges.
Ikanos’ strong central office product portfolio, as well as its technology collaboration with Alcatel-Lucent in the area of fixed access communications, should enable Qualcomm to offer a stronger product portfolio in the ultra-broadband access space, including
“Qualcomm Atheros and Ikanos have a long history of collaboration in the carrier space and share a common vision for the connected home,” said Omid Tahernia, president and chief executive officer at Ikanos. “Bringing the two companies together enables Qualcomm Atheros to accelerate implementation of its strategy for the connected home, and to move the home gateway forward as a key enabler for new carrier applications and services.”
Pursuant to the agreement, Qualcomm will commence a tender offer to acquire all of the issued and outstanding shares of common stock of Ikanos for $2.75 per share in cash, and assume all outstanding indebtedness at the closing of the transaction.
Ikanos’ board of directors has unanimously approved the transaction and is recommending the offer to Ikanos stockholders. The transaction is expected to close before the end of this year and is subject to customary closing conditions, including a minimum tender of a majority of outstanding shares of Ikanos and regulatory clearances in certain non-US jurisdictions.