Marvell acquires UTStarcom's SoC Division

UTStarcom's semiconductor design business is primarily focused on developing wireless communications solutions including 3G wireless application technologies and silicon solutions for Personal Handyphone System (PHS) products. "We are very pleased to enter into this agreement and look forward to further strengthening our relationship with UTStarcom," stated Dr. Sehat Sutardja, Marvell's president and chief executive officer. "Additionally, we are very excited to have this strong engineering team join the Marvell family as well as greatly expand our growing operations in China." Under the terms of the definitive agreement, Marvell will purchase substantially all of the assets of UTStarcom's System-on-Chip semiconductor business division for $24 million in cash. The acquisition is expected to close within sixty days following the satisfaction of regulatory requirements and other customary closing conditions. Additionally, in accordance with the definitive agreement, Marvell may pay an additional $16 million upon certain defined milestones being achieved. Upon closing, Marvell may record a one-time charge for purchased in-process research and development expenses. The amount of that charge, if any, has not yet been determined. "This divestiture is consistent with the corporate restructuring plan announced earlier this year which is focused on streamlining our business to our strategic handset and system level core competencies and better aligning the company's resources with industry trends and sales opportunities in the marketplace," said Hong Lu, chief executive officer and president of UTStarcom, Inc. "We believe that this transaction will allow us to maintain the cost benefits enabled by our internal development of ASIC chip design by leveraging the proven semiconductor capabilities of Marvell."