Qualcomm buys out Flarion for $600 million

Qualcomm buys out Flarion for $600 million

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Qualcomm, a global major in CDMA technology, is all set to further consolidate its position by acquiring Flarion Technologies, a leading developer of Orthogonal Frequency Division Multiplex Access (OFDMA) technology. Flarion is also credited with the invention of FLASH-OFDM technology for mobile broadband Internet protocol (IP) services. The deal has been finalized and Qualcomm will be shelling out $600 million for this acquisition. The actual acquisition is likely to materialize by the year-end after receiving the required regulatory approvals.

Qualcomm, who is presently undertaking a transition to 3G wireless services, is likely to make a major breakthrough in OFDMA technology as well with the acquisition of Flarion. According to Dr. Paul E Jacobs, CEO, Qualcomm, “The combination of Flarion and QUALCOMM’s engineering resources greatly strengthens our position as a continued technology innovator and leader in the wireless industry. We believe CDMA will provide the most advanced, spectrally efficient wide area wireless networks for the foreseeable future, but with Flarion we can now more effectively support operators who prefer an OFDMA or hybrid OFDM/CDMA track for differentiating their services.” The Chairman of Flarion, Ray Dolan, is also sensing a win-win situation for both companies, “ “This combination with QUALCOMM is ideal for Flarion as QUALCOMM has a proven history of bringing the most advanced technologies to market for large-scale deployments.” The acquisition of Flarion will give a boost to QUALCOMM’s position as a leader in designing and licensing OFDMA products for operators interested in OFDMA.

Going by the agreed terms between the two companies, Qualcomm initially will have to pay $267 million in the form of stock and $205 million cash. For the deal, Evercore Partners acted as the financial advisor for Flarion while Qualcomm was represented by Morgan Stanley.

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