Semiconductor giant Intel is selling its Home Gateway Platform Division to MaxLinear Inc. for $150 million. The Home Gateway Platform Division produces Wi-Fi Access Points, Ethernet and Home Gateway SoC (system on a chip) products for operator and retail markets.
The division employs an estimated 1,000 people, 200-300 of them in Israel. Intel is the largest employer in Israel's technology sector, with nearly 14,000 employees. MaxLinear says that the acquisition of the division will add $60-70 million to its quarterly revenue.
The sale of the division is part of the change led by Intel CEO Bob Swan over the past year. Swan said last November that the company was seeking a buyer for the Home Gateway Platform Division in order to focus on its core business. Intel has reported better than expected results in the past couple of quarters after several disappointing quarters, and in January this year, before the impact of the coronavirus pandemic was clear, the company forecast 2% annual revenue growth. Intel's fabs continue to work, in Israel and around the world.
The transaction is expected to close in the third quarter of 2020, subject to customary closing conditions
"Intel and MaxLinear have a strong track record of collaboration to deliver gateway platforms for the home, and I’m confident this will be a seamless transition for our mutual customers and employees," said Weng Kuan Tan, general manager of the Home Gateway Platform Division and corporate Vice President of the Client Computing Group at Intel. "It will also allow Intel’s Client Computing Group to focus on our vision of delivering PC platforms that power every person’s greatest contribution while having no impact on Intel’s Internet of Things Group or Intel’s Network Platform Group."
MaxLinear, Inc. (NYSE: MXL) provides radio frequency (RF), analog and mixed-signal integrated circuits for the connected home, wired and wireless infrastructure, and industrial and multimarket applications. The company is headquartered in Carlsbad, California. It had a market cap of $800 million before yesterday's opening on Wall Street, after a 50% drop in its share price since the beginning of 2020. Its share price rose 31.53% yesterday, boosting its market cap to over $1 billion. Nearly eighteen months ago, MaxLinear closed its development center in Herzliya leaving just a handful of employees. At its peak, the center employed about 50 people. It opened in 2016 on the basis of Israel semiconductor startup Provigent, which MaxLinear bought from Broadcom, and which Broadcom itself bought in 2011 in a deal valued at $340 million.
Published by Globes, Israel business news - en.globes.co.il - on April 7, 2020
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