Broadcom to Buy ServerWorks for $957 Million

Circuitmaker Broadcom (BRCM Quote) said Monday it has agreed to acquire independent circuit supplier ServerWorks for about $957 million. The acquisition is expected to add 2 cents to 3 cents per share to Broadcom's quarterly earnings throughout 2001, the company said.

ServerWorks is a supplier of high-performance system input/output integrated circuits for servers. Its server platforms are used in the markets for Web servers, data center servers, network attached storage, storage area networks and high performance workstations.

Broadcom said it will issue approximately 11 million shares of common stock in exchange for all outstanding shares of ServerWorks. The $957 million value of the deal is based on Friday's closing price of $87 per share for Broadcom.

Broadcom said it will issue up to 9 million additional shares of stock to stockholders and option and warrant holders of ServerWorks if the firm meets certain performance goals. Broadcom will take a one-time charge for expenses related to the acquisition in its first fiscal quarter, ending March 31.