Cypress Semiconductor (CY - Get Report) may have delivered uninspiring first-quarter results, but there's more in store for the chipmaker.

San Jose, Calif.-based Cypress Semiconductor delivered first-quarter results that were in line with Wall Street estimates by posting $425.2 million in revenue and 7 cents in earnings per share. Analysts were expecting $425.17 million in revenue and 6 cents in EPS.

Separately, the chipmaker announced that it has agreed to acquire Broadcom's (AVGO - Get Report) Wireless Internet of Things business for $550 million in cash. It also announced that Cypress CEO T.J. Rodgers will step down this week and that a search will start to replace the chief executive.

Shares of Cypress ended Thursday up 0.17% to $9.04.

Revenue was down compared to $456.4 million the previous quarter and EPS was also down from 13 cents in Q4 2015. Though Q1 revenue was down about 7%, Cypress said it was in line with its guidance and that it is consistent with seasonality of the chip industry itself.

Rodgers is stepping down after nearly 34 years of leading the chipmaker, the CEO said during a call with investors Thursday while adding that he will remain on the board of the company.

Speaking about the acquisition, Rodgers asserted that the chipmaker is getting "a pretty good deal" on the transaction though it is borrowing money to do so.

The IoT business generated about $189 million in revenue over the past year and is growing at about 17%, Rodgers further said, noting that it is "very near" a break-even point.

"You might ask why would Broadcom give away or sell this?" Rodgers asked.

He went on to note that $550 million will help the chip giant pay off $37 billion Avago shelled out for the massive acquisition of Broadcom last year. Secondly, Broadcom's strategy has been to focus on very few customers that have massive volume, while the nature of IoT requires companies to work with tens of thousands of customers, Rodgers said.

"Cypress believes the acquisition strengthens Cypress' position in embedded systems markets such as auto/industrial, and establishes it as a leader in high-growth customer IoT including wearable and home automation solutions," wrote RBC Capital Markets analyst Amit Daryanani in a Thursday note, adding that the divestiture is also in line with Avago's M&A strategy.

Meanwhile, Cypress is buying the IoT business from its larger peer on the heels of an active year on the deal front.

It most recently sold its TrueTouch Mobile business to Parade Technologies for $100 million when it was also engaged in an intense bidding war for Integrated Silicon Solution. Cypress eventually bowed out of the war against China's Uphill Investment.

Just months prior, it had completed its $5 billion stock merger with its peer Spansion.