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PMC-Sierra snaps up two companies for $1.3 bln

PMC-Sierra, Inc. (Nasdaq: PMCS) said Friday it would buy two privately held semiconductor companies, Extreme Packet Devices and AANetcom, for about $1.3 billion to boost its broadband communication semiconductors.

Shares in PMC-Sierra were up 7 to 192 7/16. The stock rose recently on a strong fourth quarter and a stock-split.

PMC-Sierra bought Extreme Packet Devices, Inc (EPD) for shares worth about $415 million in a pooling-of-interests transaction. The company specializes in semiconductors for high speed IP and ATM traffic management. Extreme Packet is a fabless operation, meaning it doesn't manufacture its own chips.

EPD's traffic management chip set works with line cards for terabit switches to meet cutting-edge speed, capacity and price targets, PMC Sierra said.

PMC-Sierra also announced Friday the acquisition of another privately held fabless semiconductor company AANetcom for 4.8 million PMC-Sierra shares, or about $890 million.

AANetcom's goes in switches and routers for telecommunication access equipment, and optical networking.

PMC-Sierra said it also acquired AANetcom for its employees, many of whom came from Bell Labs. PMC-Sierra expects to rapidly expand the company's design center to increase R&D in optical networking.

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