Conexant Systems acquires Maker Communications

Communications chip maker Conexant Systems, Inc. (Nasdaq: CNXT) said Monday it will acquire Maker Communications (Nasdaq: MAKR) in a stock swap valued at $990 million.

Conexant (estimates) said the acquisition of Maker will broaden its portfolio to include programmable, high-performance network processors, software and development tools. Both companies (chart) have done well on Wall Street because of the hot market for Internet infrastructure.

Under the deal, Maker shareholders will receive 0.66 of a share of Conexant common stock for each share of Maker common stock they own.

Conexant, which has handily topped consensus in recent quarters, said the transaction will be "slightly dilutive to fiscal year 2000 earnings, before one-time charges and goodwill authorization." The company said the acquisition will be accretive to earnings a year after closing the transaction. Conexant also said it expects to build revenue to an annualized revenue run-rate of $100 million by the end of calendar 2001.

"This acquisition strategically extends Conexant's network access product portfolio into high value, software-intensive, protocol processing applications," said Dwight W. Decker, CEO of Conexant, in a statement.

Conexant, through its network access division, offers physical-layer communications products, including asynchronous transfer mode (ATM), T1/E1 and T3/E3 carrier, optical networking (SONET/SDH), digital subscriber line (DSL), and multi-service voice and data access concentration.

With Maker in the fold, Conexant said it will focus more on system integration as telecommunication carriers move to next-generation networks.

The acquisition is expected to close in 90 days subject to shareholder approval.

Conexant competes with Broadcom (Nasdaq: BRCM), which just introduced a new cable modem chip.