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EXHIBIT 99.1
NEWS RELEASE
BROADCOM MEDIA CONTACTS BROADCOM FINANCIAL ANALYST CONTACT
Bill Blanning or Eileen Algaze William Ruehle
Corporate Communications Vice President and Chief Financial Officer
949-450-8700 949-450-8700
[email protected] [email protected]
[email protected]
VISIONTECH MEDIA CONTACT
Orit Zahar
Corporate Communications
011 972 9 951 2877
[email protected]
BROADCOM TO ACQUIRE VISIONTECH, LTD.,
A LEADING SUPPLIER OF MPEG-2 COMPRESSION TECHNOLOGY
Broadcom and VisionTech to Debut a New Generation of Personal Video
Recording-Enabled Set-Top Boxes at the Western Cable Show in Los Angeles
IRVINE, Calif. and HERZLIYA, ISRAEL - November 28, 2000 - Broadcom Corporation
(Nasdaq: BRCM), the leading provider of integrated circuits enabling broadband
communications, today announced that it has signed a definitive agreement to
acquire VisionTech, Ltd., a leading supplier of digital video/audio MPEG-2
compression and decompression chips enabling Personal Video Recording (PVR),
interactive videoconferencing, and Internet Protocol (IP) video streaming for
the consumer electronics market.
Founded in 1996, VisionTech is a privately held, fabless semiconductor company
headquartered in Herzliya, Israel. VisionTech's latest MPEG-2 video/audio
encoder chip, Kfir-2(TM), has been adopted by many set-top box manufacturers,
including Motorola Broadband Communications Sector (formerly General
Instrument), Scientific-Atlanta, Pace, Microsoft WebTV, as well as PVR pioneer
Replay TV.
"Motorola has been working with VisionTech during the past year to incorporate
PVR functionality in the DCT-5000 and our other converged interactive set-top
models," said Dave Robinson, Senior VP and General Manager of Motorola's Digital
Network System business unit. "We have been impressed with VisionTech's
technology and highly talented engineers and applaud both Broadcom and
VisionTech in their decision to combine resources. Broadcom has been a key
supplier to Motorola Broadband for years. This move helps ensure such a
continued role as we evolve our triple-play solutions--enabling broadband
operators worldwide to provide the very best integrated video, voice and
high-speed data services."
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Personal Video Recording enables viewers to freeze a live TV program, instantly
replay or rewind a program being watched, and skip ahead in a recorded program
to a favorite movie scene or the next play of a sporting event, offering greater
control over the TV-viewing experience. Viewers will be able to quickly find
programs to watch, as well as to record and view programs of their choice. PVR
can monitor viewers' program preferences and record similar shows for future
viewing.
According to Cahners In-Stat, PVR unit shipments are expected to grow
significantly over the next few years. Between 2001 and 2003, unit shipments of
PVR-enabled set-top boxes are expected to increase approximately 275 percent
each year. During the same period, the installed base of PVR-enabled set-top
boxes is expected to grow to eight million units.
"PVR is one of the most compelling consumer applications which will radically
change the way people watch TV, allowing simultaneous recording and playback of
live broadcast - without a VCR or videotape, " said Dr. Henry T. Nicholas III,
Broadcom's President and CEO. "VisionTech's capability to compress live video in
real time will be used across all of Broadcom's product lines for applications
ranging from distributed video over home networking to IP video streaming over
the Internet, also changing the way people use their computers, digital video
cameras and other consumer electronics to communicate over broadband."
"By 2005, PVR functionality will become an integral component of virtually every
set-top box. We look forward to combining our MPEG expertise with Broadcom's
market-leading broadband technologies," said Amir Morad, VisionTech's President
and CEO. "By integrating our technology with Broadcom's key strengths in
video/audio decompression and broadband communication technologies, we will be
uniquely positioned to address the growing set-top box and home networking
markets."
The combination of Broadcom's family of interactive-TV video decoder devices and
VisionTech's MPEG-2 single-chip compression technology creates the industry's
most advanced and comprehensive solution for next generation PVR-enabled set-top
boxes. This combination will give set-top manufacturers more integrated
features, higher flexibility and improved price/performance. Broadcom and
VisionTech will demonstrate a complete PVR-enabled set-top box solution at the
Western Cable Show, November 29-December 1, at the Los Angeles Convention
Center.
Following the acquisition, VisionTech will form the core of Broadcom Israel, a
new subsidiary that will be managed by Morad. Broadcom Israel will continue to
focus on developing silicon solutions that enable MPEG compression of voice,
video and data as well as evaluate new synergistic technologies from the myriad
start-up companies operating in the region.
In connection with the acquisition, Broadcom will issue in aggregate about 7.96
million shares of its Class A common stock in exchange for substantially all of
the assets of VisionTech and upon exercise of outstanding employee stock options
and other rights of VisionTech. The consideration includes Broadcom Class A
common stock reserved for future issuance to customers upon the exercise of
outstanding performance-based warrants of VisionTech that become exercisable
upon satisfaction of certain customer purchase requirements. The
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transaction is expected to close within 60 days and will be accounted for under
the purchase method of accounting. The Boards of Directors of both companies
have approved the transaction, which awaits approval by VisionTech's
shareholders and the satisfaction of regulatory requirements and other customary
closing conditions. Broadcom expects to record a one-time charge for purchased
in-process research and development expenses related to the acquisition upon its
consummation.
ABOUT VISIONTECH
VisionTech, Ltd. is a leading provider of highly integrated silicon solutions
that enable MPEG compression and decompression of video, voice and data content
for consumer electronics, home entertainment and broadband communications.
Applications for VisionTech's products include personal TVs, personal video
recorders, cable set-top boxes, digital video recorders, home networking and
desktop multimedia. VisionTech is headquartered in Herzliya, Israel, and may be
contacted at +972-9-9512877 or at www.visiontech-dml.com.
ABOUT BROADCOM
Broadcom Corporation is the leading provider of highly integrated silicon
solutions that enable broadband digital transmission of voice, video, and data.
Using proprietary technologies and advanced design methodologies, the company
designs, develops and supplies integrated circuits for a number of the most
significant broadband communications markets, including the markets for cable
set-top boxes, cable modems, high-speed local, metropolitan and wide area
networks, home networking, Voice over Internet Protocol (VoIP), carrier access,
residential broadband gateways, direct broadcast satellite and terrestrial
digital broadcast, optical networking, digital subscriber lines (xDSL) and
wireless communications. Broadcom is headquartered in Irvine, Calif., and may be
contacted at 949-450-8700 or at www.broadcom.com.
SAFE HARBOR STATEMENT OF BROADCOM CORPORATION UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995:
This release may contain forward-looking statements based on our current
expectations, estimates and projections about our industry, management's
beliefs, and certain assumptions made by us. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will"
and variations of these words or similar expressions are intended to identify
forward-looking statements. In addition, any statements that refer to
expectations, projections or other characterizations of future events or
circumstances, including any underlying assumptions, are forward-looking
statements. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict. Therefore, our actual results could differ materially and adversely
from those expressed in any forward-looking statements as a result of various
factors.
Important factors that may cause such a difference for Broadcom in connection
with the acquisition of VisionTech, Ltd. include, but are not limited to, the
risks inherent in acquisitions of technologies and businesses, including the
timing and successful completion of technology and product development through
volume production, integration issues, costs and unanticipated expenditures,
changing relationships with customers, suppliers and strategic partners,
potential contractual, intellectual property or employment issues, accounting
treatment and charges, and the risks that the acquisition cannot be completed
successfully or that anticipated benefits are not
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realized; the rate at which present and future customers and end-users adopt
Broadcom's technologies and products in the markets for Personal Video Recording
and MPEG-2 compression and decompression products; delays in the adoption and
acceptance of industry standards in the foregoing markets; the timing of
customer-industry qualification and certification of our products and the risks
of non-qualification or non-certification; the timing, rescheduling or
cancellation of significant customer orders; the loss of a key customer; the
volume of our product sales and pricing concessions on volume sales; silicon
wafer pricing and the availability of foundry and assembly capacity and raw
materials; the qualification, availability and pricing of competing products and
technologies and the resulting effects on sales and pricing of our products;
intellectual property disputes and customer indemnification claims; fluctuations
in the manufacturing yields of our third party semiconductor foundries and other
problems or delays in the fabrication, assembly, testing or delivery of our
products; our ability to specify, develop or acquire, complete, introduce,
market and transition to volume production new products and technologies in a
timely manner; the effects of new and emerging technologies; the effectiveness
of our product cost reduction efforts; the risks of producing products with new
suppliers and at new fabrication and assembly facilities; problems or delays
that we may face in shifting our products to smaller geometry process
technologies and in achieving higher levels of design integration; the risks and
uncertainties associated with our international operations; our ability to
retain and hire key executives, technical personnel and other employees in the
numbers, with the capabilities, and at the compensation levels needed to
implement our business and product plans; changes in our product or customer
mix; the quality of our products and any remediation costs; the effects of
natural disasters and other events beyond our control; the level of orders
received that can be shipped in a fiscal quarter; general economic conditions
and specific conditions in the markets we address; and other factors.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, recent Current
Reports on Forms 8-K and 8-K/A, and other Securities and Exchange Commission
filings discuss some of the important risk factors that may affect our business,
results of operations and financial condition. We undertake no obligation to
revise or update publicly any forward-looking statements for any reason.
Broadcom(R) and the pulse logo are trademarks of Broadcom Corporation and/or its
affiliates in the United States and certain other countries. VisionTech and
Kfir-2 are trademarks of VisionTech, Ltd. All other trademarks mentioned are the
property of their respective owners.
