The deal is valued at about $26.2 million, based on the closing price of $2.88 per share of the company's stock on Friday. All 45 employees of Dublin-based Massana will join Agere.
Allentown, Pa.-based Agere said it would use Massana's technology to deliver a range of Gigabit Ethernet products that are intended to juice the performance of corporate networks that use existing copper networks. It also said it would deliver a new 0.13-micron chip based on physical layer device, or PHY, technology in early 2004.
"Massana stood out in the Gigabit Ethernet field because of its superior smart math architecture, which delivers better signal-to-noise ratio and lower power consumption, enabling more efficient multiport solutions," Ed Roberts, vice president of Agere's new Ethernet Division, said in a statement.
Citing market research firm IDC, Agere said the total market for Ethernet chips is expected to be worth $2.5 billion in 2005 and that the Gigabit Ethernet segment of this market is likely to grow at 37 percent from last year to 2005.
Agere expects the acquisition to have minimal impact on its earnings in the current quarter and to be dilutive to earnings for the full fiscal 2004 by 1 cent to 2 cents per share.