Vitesse to Acquire Cicada

CAMARILLO, Calif., Dec. 30 -- Vitesse Semiconductor Corp. announced yesterday it will acquire Cicada Semiconductor Corp. for approximately $66 million in cash.

Cicada is a supplier of DSP-based integrated circuit solutions to developers of high-speed communications systems used in local area networks (LANs).

The transaction is subject to customary closing conditions, including the approval by Cicada's stockholders and is anticipated to close in the first calendar quarter of 2004. Vitesse said it expects the Cicada products to contribute about $10 million in revenues in calendar 2004, with a majority to be realized in the second half of the year as customers upgrade their 10/100 Mb/s networks to Gigabit Ethernet speeds. It also said that by the time the transaction closes, Cicada will have reduced its workforce to approximately 40 employees, most of whom will be engaged in product development activities.

"This is a natural combination for both companies," said Lou Tomasetta, president and CEO of Vitesse. "Vitesse and Cicada have been jointly selling gigabit-speed switch solutions for over a year, comprised of Vitesse's LAN switches and Cicada's Gigabit Ethernet copper transceivers. The combined companies will now offer best-in-class switches with the highest levels of integration and the lowest power gigabit transceivers. We expect this acquisition to double our revenues in the LAN switch market and to position us to gain share as the market embraces gigabit switch products."

Vitesse develops silicon solutions used in the networking, communications and storage industries.

For more information, visit: www.vitesse.com