Atheros looks for a home run with Intellon

Posted Sep 8th 2009 1:00PM by Tom Taulli
Filed under: Deals

So far this year, the shares of Atheros Communications (NASDAQ: ATHR) have performed quite nicely, almost doubling. The company develops sophisticated semiconductor solutions for wireless and wired communications.

Now, Atheros wants to bulk up; that is, the company has agreed to pay $244 million for Intellon (NASDAQ: ITLN).

And, it looks like a smart deal. Intellon develops powerline communications products for the home. The technology is known as HomePlug and it has been under development for more than 20 years. In fact, there are 34 issued patents. As a testament to its technology prowess, Intellon has shipped over 40 million chipsets over its history.

Essentially, the deal for Intellon is about the bet that the "digital home" will be a huge market opportunity. And, in light of the increasing new connected technologies, this certainly makes sense. For example, with Intellon it's possible to integrate VOIP, smartphones, gaming consoles, DVRs, TVs, security cameras, and so on. Moreover, with the scale of Atheros, this vision has a better chance of coming to fruition.

On news of the deal, Intellon's shares rose 42% to $7.09 in early trading Tuesday.

Tom Taulli is the author of various books, including The Complete M&A Handbook.

Tags: Atheros, ATHR, Intellon, inthenews, ITLN