Motorola snaps up DSP board developer

Motorola snaps up DSP board developer
By Robert Keenan, Communication Systems Design
February 22, 2001 (6:19 a.m. EST)
URL: http://www.eetimes.com/story/OEG20010221S0056

TEMPE, Ariz. — Looking to strengthen its position in the communication board market, Motorola Inc. has signed a definite pact to acquire Blue Wave Systems Inc., a noted developer of DSP boards and software. Under the agreement announced Wednesday (Feb. 21), Blue Wave and its products will be integrated into Motorola's Computer Group, known as a supplier of CompactPCI board solutions.

Blue Wave Systems is known to the communication market as the supplier of the ComStruct line of DSP resource boards and of framework architecture for communication technologies software, which are employed in the development of wireless and voice-over-IP (VoIP) infrastructure and equipment.

The acquisition puts Blue Wave's relationship with Texas Instruments Inc. under heightened scrutiny. Blue Wave has been a large supporter of TI DSPs, and uses a number of these processors in its wireless and VoIP solutions.

"We hav e a very strong relationship with TI that has been a fundamental part of our business," said Rob Shaddock, president and chief executive officer of Blue Wave (Carrollton, Texas). "We intend to keep this relationship going."

Wayne Sennett, senior vice president and general manager of Motorola Computer Group (Tempe, Ariz.), echoed those sentiments. "We have a tremendous relationship with a large number of vendors," Sennett said in a conference call Wednesday morning. "I don't believe this agreement will affect our current relationships with vendors."

Asked about Blue Wave's processor selection going forward, Shaddock and Sennett both said that Blue Wave will continue to use TI's DSPs in its boards. Both said that market conditions and customers will drive the DSP solutions employed in ComStruct boards.

The acquisition could put Blue Wave in line to tap Motorola's DSP and PowerPC processors. Shaddock said Blue Wave will have access to additional Motorola solut ions, but wouldn't elaborate on any specific solutions that might be chosen.

Under the agreement, Motorola will exchange approximately 6.5 million common shares for all of the fully-diluted common shares of Blue Wave. The deal is expected to have a have a total value between $135 million and $165 million.

The merger, which has already been approved by the boards of both companies, is intended to be a tax-free reorganization. The acquisition will be accounted for as a purchase and is expected to be completed in the second quarter of 2001.

Robert Keenan is editor-in-chief of Communication Systems Design, a sister publication of EE Times.