In a deal announced in December and closed in early May, Avago acquired LSI Corp. for some $6.6 billion. That acquisition gave Avago an entry into the storage and wired-infrastructure markets. Avago’s principal business has been analog RF chips and other integrated circuits that are used in cell phones, consumer appliances and a variety of networking gear.
The acquisition of PLX adds strength to Avago’s presence in the storage and Peripheral Component Interconnect (PCI) networking switch and internal bus market.
Avago expects the acquisition to add immediately to non-GAAP earnings per share and anticipates “driving the PLX business to a level consistent with Avago’s long term business model by the end of fiscal year 2015.”
Avago’s stock is up 95% over the past 12 months, and the company’s position as a supplier to Apple Inc. (NASDAQ: AAPL) has been a major driver of that share price rise.
Shares of PLX were up about 10% at $6.54 in premarket trading Monday, in a 52-week range of $4.57 to $6.91.
Shares of Avago were inactive, having closed at $71.57 on Friday in a 52-week range of $35.75 to $72.50.
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