Broadcom Corp. (BRCM) recently signed a definitive agreement to acquire Dune Networks for $178 million.

The purchase price will be paid in cash. A portion of the purchase price which is attributable to unvested employee stock options will be paid in stock units. A portion of the cash consideration payable to the stockholders will be placed into escrow pursuant to the terms of the acquisition agreement.

The company expects the acquisition of Dune Networks will be neutral to slightly accretive to earnings per share in 2010. The merger is expected to close by the end of first quarter ending March 31, 2010.

Dune Networks is a privately-held company that develops switch fabric solutions for data center networking equipment.

Management added that Dune’s scalable interconnect fabric when combined with Broadcom’s Ethernet product will strengthen the company’s portfolio of solutions for data center networking equipment. The company expects the Dune technology to meet the emerging requirements for cloud computing networks at a large scale along with enabling new market applications for Ethernet in the data center.

Dune Networks has developed a scalable chipset that supports bandwidth speeds of up to 100Gbps per port and can connect more than ten thousand servers (ports) in a single deployment.

Broadcom is a fabless company, designing and marketing semiconductor components of network voice, video, and data traffic for various applications.

The basic underlying theme to watch at Broadcom continues to be the progress with the launch of new, more highly integrated products at more advanced progress geometries. This is the key differentiator in every end market where Broadcom competes. Broadcom consistently introduces highly integrated solutions in some of the fastest growing markets in the technology sector. Broadcom’s prospect of growth continues to outpace its peers, given its leading ability to integrate communications and processing in both current and emerging markets.

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