Qualcomm to buy Ikanos for home gateway play

Wireless technology supplier Qualcomm Inc. (NASDAQ: QCOM) plans to dip its toe into copper-based fixed broadband access with the acquisition of broadband networking semiconductor and software provider Ikanos Communications, Inc. (NASDAQ: IKAN). The $47 million acquisition, which will be made via the company's subsidiary, Qualcomm Atheros, Inc., will see Qualcomm pay $2.75 per share in cash for all outstanding shares of Ikanos stock as well as assume all outstanding indebtedness.

Ikanos has been very active in the DSL market. It also has developed G.fast technology, working in particular with Alcatel-Lucent (see "Ikanos attracts Alcatel-Lucent as a strategic investor"). The deal, if consummated, will add broadband access and modem technologies to Qualcomm Atheros's carrier Wi-Fi and wired connectivity operations. The company expects to leverage Ikanos's technology to create central hubs for Internet of Everything (IoE) enabled devices, services, and 3G/LTE small cells.

"Qualcomm Atheros has always viewed the home gateway as the enabler for consumers to not only access the Internet for browsing and downloading content and video streaming, but also as the hub of the Internet in the home for a variety of reliable and high quality services," said Rahul Patel, senior vice president and general manager, connectivity, Qualcomm Technologies, Inc. "The combination of Qualcomm Atheros's broad home gateway IP portfolio, including Wi-Fi, powerline, small cell, and Ethernet switch technologies, and Ikanos' advanced wired modem technology, is designed to create a complete solution for a wide range of home gateway products to better serve the carrier segment."

Qualcomm purchased communications silicon provider Atheros Communications in 2011 for $3.1 billion. Atheros at the time was active in both the wireless and PON markets (see, for example, "Atheros unveils 10G EPON OLT, ONU chips" and "Qualcomm Atheros chip supports EPON for FTTH and power grids").

Ikanos' board of directors has unanimously approved the transaction, which the parties hope to close before the end of this year, subject to customary closing conditions, including a minimum tender of a majority of outstanding shares of Ikanos and regulatory clearances in certain non-US jurisdictions.

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