Innovision has developed a suite of designs, patents and expertise, known as Gem NFC IP, which enables near field communication technology to be added at low cost to mass-market mobile phones and other devices.
Current generation NFC phones require a separate NFC controller chip to be built into the handset. With Innovision's Gem NFC IP, mobile phone chipset manufacturers can build the technology into their existing 'combo chip' products, already used to add Bluetooth, WiFi, FM radio and GPS to current mobile phones.
The advantage of this approach is that it enables NFC to be added to mass market phones far more cheaply — under US$1 per unit compared to the $5+ cost of a standalone NFC controller. Innovision makes its technology available to semiconductor companies on a licensing basis and several major suppliers to the mobile phone industry have already licensed the firm's technology.
Broadcom specialises in communications and networking semiconductors and had revenues of $4.49bn in 2009. It is a major player in the combo chip market. Clients include Apple, which uses Broadcom's WiFi+Bluetooth combo chip in the iPhone 3GS, iPad and iPod Touch.
The acquisition of Innovision, which is listed on the Alternative Investment Market at the London Stock Exchange, is being made through the company's Broadcom International subsidiary. Terms have been agreed with Innovision's board which see Broadcom making an all-cash offer to acquire all of the issued and to be issued shares of Innovision.
Under the terms of the offer, Innovision shareholders will receive £0.35 ($0.52 approx) per share in cash for each Innovision share held — an 84.2% premium on the closing price of Innovision common stock on 17 June 2010 which, says Broadcom, values the deal at a total of $47.5m (£32m approx) at current exchange rates. Broadcom expects to close the acquisition of Innovision in the third quarter of 2010.