Qualcomm To Buy Flarion Tech For $600 Million Cash, Stock"
SAN DIEGO -(Dow Jones)- Qualcomm Inc. (QCOM) agreed to acquire privately held Flarion Technologies for $600 million in cash and stock, in a deal that will expand its wireless-technology offerings.
Qualcomm, which makes chips used in cellphones, may also pay an additional $205 million in cash and stock upon the satisfaction of certain milestones in the next few years, the company said in a press release Thursday.
Flarion develops technology called orthogonal frequency division multiplex access, or OFDMA, which Qualcomm said will complement its own code division multiple access, or CDMA technology, a standard used for cellphones. Qualcomm currently dominates CDMA technology, with companies that make handsets or semiconductors used in handsets paying a licensing fee to Qualcomm.
"With this acquisition, Qualcomm will be in a stronger position to support advanced development in both CDMA and OFDMA technologies," said Chief Executive Paul Jacobs in the release. "We believe CDMA will provide the most advanced, spectrally efficient wide-area wireless networks for the foreseeable future, but with Flarion we can now more effectively support operators who prefer an OFDMA or hybrid OFDMA/CDMA track for differentiating their services."
A Qualcomm spokeswoman wasn't immediately available for more information on the differences between CDMA and OFDMA technology.
The company expects the acquisition to dilute its pro forma earnings for the fiscal year ending in September 2006 by about 3 cents a share. In addition, Qualcomm anticipates one-time charges of roughly $10 million, mainly related to in-process research and development, upon closing.
Wall Street analysts, on average, expect the company to earn $1.43 a share for fiscal 2006, according to Thomson First Call.
The deal is expected to close later this year, pending regulatory approval and other customary conditions.
Dow Jones Newswires
08-11-05 0925ET "
Posted to the site on 11th August 2005
