VITESSE TO ACQUIRE `NETWORK CHIP' FIRM.Byline: Ben Sullivan Daily News Staff Writer In an effort to increase its presence in the growing Internet processor market, computer chip maker Vitesse Semiconductor Inc. said it will acquire a small Northern California Northern California, sometimes referred to as NorCal, is the northern portion of the U.S. state of California. The region contains the San Francisco Bay Area, the state capital, Sacramento; as well as the substantial natural beauty of the redwood forests, the northern firm for $65 million. The maker of high-speed, gallium arsenide An alloy of gallium and arsenic compound (GaAs) that is used as the base material for chips. Several times faster than silicon, it is used in high frequency applications such as cellphones, DVD players and fiber optics. chips used in the telecommunications industry said it will buy Santa Clara-based XaQti Corp., a 35-employee maker of ``network-on-a-chip'' products used to direct the flow of data across the Internet. The purchase will be financed entirely with Vitesse stock. Analysts greeted news of the merger positively, saying the companies' strengths should complement each other. ``I like the acquisition,'' said Arun Veerappan, an analyst at BancBoston Robertson Stephens. ``It's a step in the right direction for Vitesse.'' Investors also appear pleased, bidding up Bidding up Moving the bid price higher. Vitesse stock $1.375, or 2.7 percent, to $52.625 on a day when the technology-heavy Nasdaq exchange fell 66.54 to 2453.66. The XaQti purchase will be accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. and is expected to have no material impact on Vitesse's financial results, the company said. The transaction is expected to be completed by the end of July. Officials at both companies said the acquisition should broaden their potential customer base. Vitesse had 1998 sales of $175 million, mostly to the telecom industry. ``There is a great deal of synergy in technology between Vitesse and XaQti,'' Alak Deb, co-founder and chief technology officer of XaQti said in a written statement accompanying the announcement. ``The merged companies will bring together complementary core competencies to develop high-performance and cost-effective data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. solutions.'' Potential new customers include Internet backbone companies and Internet service providers Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. . |
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