PMC-Sierra buys Extreme Packet Devices and AANetcom for $1.3 billion in stock
Sep 3, 2013
BURNABY, British Columbia-- In a double move to expand its offerings in broadband communications and high-speed transmission equipment, PMC-Sierra Inc. today announced back-to-back acquisitions of startups Extreme Packet Devices Inc. and AANetcom Inc. Together, the two companies are being acquired for $1.3 billion in stock. PMC-Sierra said it bought year-old Extreme Packet Devices of Kanata, Ontario, for $415 million in stock to gain semiconductor products and technology for high-speed Internet protocol and Asynchronous Transfer Mode (ATM) traffic management at 10-gigabits-per-second rates. This capability is aimed at development of OC-48 and OC-192 multi-service switches. San Jose-based AANetcom was acquired by PMC-Sierra for 4.8 million shares of stock, valued at $890 million. The acquisition gives PMC-Sierra expertise and technology for gigabit and terabit switches and routers, telecommunication access equipment, and optical networks. Last month, three-year-old AANetcom announced the industry's first CMOS octal backplane transceiver, which increases performance 10 times by boosting the bandwidth of backplanes where the line cards interface to the switching fabric (see Feb. 7 story ). "We expect to rapidly expand AANetcom's new Allentown design center in keeping with our strategy to aggressively invest in communications research and development," said Bob Bailey, president and CEO of PMC-Sierra. "From a technology roadmap perspective, optical networking is an explosive growth area and we intend to address it with high quality, system level architectural innovations developed using AANetcom technologies. "
PMC-Sierra said Exteme Packet Devices' technology and staff offers extensive systems-level knowhow for development of complex chip set solutions for multi-service switches and routers. "The addition of Extreme Packet Devices' expertise is a very complementary fit to our broadband communications semiconductor family," Bailey said. "Today's competitive communications market demands a highly integrated architecture of silicon solutions for high speed multi-service equipment. EPD's ability to developIP and ATM traffic management solutions at higher rates will further extend PMC-Sierra's extensive line of high speed, highly integrated chip set solutions for mixed traffic at all rates," he added. AANetcom employs over 50 people in Allentown, Pa., and San Jose. Many of the workers are former Bell Laboratories employees. Extreme Packet Devices employs more than 60 workers in Kanata. The acquisition of both companies will be accounted for as a pooling of interests.