NetLogic to buy privately held fabless chip provider

Chipmaker NetLogic Microsystems Inc said it will buy a privately held fabless semiconductor provider for an initial USD 77 million in cash, to expand its footprint in the 4G long-term evolution (LTE) market.

Optichron Inc's advanced processors will support wider signal bandwidth, spectrum maximization and power efficiency for carriers deploying next-generation LTE, NetLogic said.

"The exponential growth in mobile data traffic in the next five years, coupled with global spectrum scarcity, are forcing service providers and operators worldwide to push the limits on capacity and throughput for their limited spectrum," NetLogic said in a statement.

NetLogic also said it will make milestone payments of up to an additional USD 108.5 million in cash to Optichron shareholders by March 31, 2013, and an additional USD 12.5 million in stock to Optichron employees.

NetLogic will also assume about $22 million of restricted stock units for Optichron employees who join NetLogic after closing of the deal, expected in the second quarter of this year.

Shares of the Santa Clara, California-based NetLogic, with a market value of USD 2.6 billion, were trading up 1% at USD 38.8 in morning trade on Nasdaq. They had touched a life-high of USD 43.24 on March 4.