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Intel to buy Basis for $450 million

Intel Corp. (Nasdaq: INTC) said Tuesday it will buy privately-held Basis Communications Corp. for about $450 million in cash and assumed options.

The acquisition is one of many recent purchases by the computer chip giant, which most recently snapped up Giga as part of its diversification into communications chips.

Intel shares were up 2 3/4 to 137 3/4 in a rocky day for tech stocks. Shares in Cirrus Logic Inc. (Nasdaq: CRUS), which announced Tuesday that it expects to benefit financially as a result of Intel's purchase of Basis, in which it held a stake, lost 1/8 to 18 3/8.

Cirrus Logic said it expects to report a gain between $80 million and $85 million in cash for the June quarter.

The acquisition adds to Intel's lineup of communications and software products and immediately expands its network processor line. Basis makes semiconductors and other products used in equipment that directs traffic across the Internet and corporate networks.

Intel said it will add Basis' technology into its Internet Exchange architecture in order to pursue opportunities in the market for communications equipment used in homes and small to medium-size businesses. This market is expected to increase rapidly with the deployment of digital subscriber line (DSL) technologies and data-over-cable services.

In addition to network processors, Basis has wide area network (WAN) and serial communication semiconductor products, as well as PC card and "interface" controller devices targeted at the communications equipment market segments.

On completion of the deal, Basis will become a wholly owned subsidiary of Intel operating within Intel's Network Communications Group.