Broadcom Sees VisionTech Slightly Diluting 2001 First Half
Broadcom
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, which today said it
would buy Israeli chipmaker
VisionTech
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, said the deal would dilute earnings slightly in the first two quarters of 2001, then add to earnings by the third quarter of next year.
The high-speed chipmaker expects the acquisition to dilute earnings by a penny a share in the first and second quarters of 2001. Analysts on average expect the company to earn 32 cents a share in the first quarter and 35 cents a share in the second quarter, according to
First Call/Thomson Financial
. Wall Street is expecting third-quarter earnings of 37 cents a share.
Privately held semiconductor company VisionTech produces chips that allow television viewers to freeze and manipulate live programs. The chips also encode and decode video.
Broadcom said it will issue 7.96 million shares for the company, making the deal worth about $677 million, almost $100 million below the value of the transaction when it was first announced this morning, as shares of Broadcom lost substantial ground during the trading session. The acquisition was initially valued at $776.6 million based on Broadcom's Monday closing price of $97.56.
