SAN DIEGO — May 24, 2011— Qualcomm Incorporated (NASDAQ: QCOM), wireless technologies, products and services company, today announced that it has completed its acquisition of Atheros Communications, Inc. The Atheros team will operate as Qualcomm Atheros, Inc., a wholly owned subsidiary of Qualcomm. In addition, the Qualcomm connectivity team will shift over to Qualcomm Atheros to combine resources and roadmaps. This creates one of the industry’s most robust portfolios of connectivity, networking and location solutions for mobile, computing, enterprise and consumer electronic devices. Together, the two companies will be able to utilize their technology leadership positions, relationships and assets to more effectively address promising new business opportunities.
The acquisition, which was completed at an enterprise value of approximately $3.1 billion, enables Qualcomm to expand its presence in existing businesses and grow into a variety of adjacent businesses including home, enterprise and carrier networking. Going forward, we plan to continue to invest in, support and grow Qualcomm Atheros’ robust portfolio of businesses and technologies.
While the accounting for the transaction is not yet finalized, Qualcomm estimates that on a Non-GAAP basis the acquisition will be modestly dilutive to earnings per share in fiscal 2011 and modestly accretive in fiscal 2012, consistent with our previous forecasts. In addition, based on preliminary estimates, we expect the transaction to be further dilutive to GAAP earnings by approximately $0.09 to $0.13 per share for the remainder of fiscal 2011 driven primarily by certain near-term purchase accounting charges and secondarily by ongoing share-based compensation expense. These near-term purchase accounting charges result from the requirement in ASC 805 to record acquired inventory and backlog at fair value at the time of acquisition, which will result in reduced margin contribution as inventory and backlog as of the acquisition date are converted to revenues over the remainder of fiscal 2011.
“Today marks another milestone in Qualcomm’s mission to provide our customers with the best-in-class connectivity and networking solutions needed to capitalize on expanding business opportunities beyond handsets and tablets,” said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. “We believe that the complementary cultures, product portfolios, sales channels and leadership in our respective fields will help make Qualcomm a leading force in the networking, computing and consumer electronics industries for years to come.”
Dr. Craig Barratt, formerly CEO and president of Atheros, is now president of Qualcomm Atheros and reports directly to Steve Mollenkopf, executive vice president and group president of Qualcomm.
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