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RSS feedsIntel will acquire mobile computing equipment maker Xircom in an all-cash transaction valued at $748m as part of a move to bolster its wireless communications offerings.
The chip giant will make a $25 per share tender offer for all Xircom's stock within 10 days, representing a 38 per cent premium over Xircom's $18.06 close on Friday, the companies said.
Intel officials said that the acquisition would be used to supplement its PC- and server-based network access business by enabling the company to provide new products for notebook and mobile computer users.
Mark Christensen, Intel's vice president and general manager of the firm's Network Communications Group (NCG), said: "Xircom's strengths in small form factor design, combined with our silicon expertise, will allow us to provide customers with new and innovative solutions for linking mobile computing devices to corporate wired and wireless networks."
Xircom chief executive Dirk Gates said the acquisition should benefit customers by giving them access to a more complete line of products. The company makes communications cards that are used as an accessory to connect laptop computers to networks and cell phones.
The acquisition is expected to be completed in the first quarter of this year, at which time Xircom, which employs 1900 people, will become a wholly owned subsidiary of Intel and part of the NCG. Intel said it already owns about six per cent of Xircom.
Shares in Xircom have fallen 72 per cent from a 52-week high of $64.56 set last January. The company said that it made a net loss of $2.5m in the fiscal first quarter compared with net income of $12.7m a year ago. Sales in the period ended 31 December fell 3.2 per cent to $120.1m from $124.1m.
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