Ikanos Enters Residential Gateway Market With Acquisition of Product Line from Analog Devices

January 12th, 2006-- Ikanos Communications, a developer and provider of Fiber Fast(TM) broadband solutions, today announced that it has signed a definitive agreement to acquire the network processor product line of Analog Devices, Inc. including ADSL ASICs.

The all cash transaction is valued at approximately $30 million, subject to customary closing adjustments. The acquisition includes these broadband gateway products, and the related technology, intellectual property, and development and support teams. The acquisition is expected to close, subject to the satisfaction or waiver of certain conditions, by the end of the first quarter of 2006.

The acquisition will enable Ikanos to deliver the highest performance VDSL residential gateway solution currently available. Designed to deliver 200 Mbps of sustained throughput when performing routing, firewall and VPN operations, the Fusiv(R) gateway processor is an ideal complement to Ikanos' VDSL PHY solutions. The acquisition is expected to extend Ikanos' existing Layer 1 capabilities with essential Layer 2 through Layer 7 gateway technologies including routing, security, wireless LAN, VoIP, and Quality of Service.

"This transaction is an important, logical step in Ikanos' strategy and significantly enhances our ability to capitalize on worldwide demand for video services," said Rajesh Vashist, chairman and CEO of Ikanos. "Ikanos gains a full suite of gateway products spanning a broad range of carrier requirements, and enhances its R&D capabilities through the addition of a tremendously talented technical team."

Ikanos can leverage the Fusiv gateway products with existing VDSL2 solutions to reduce OEMs' development costs and time to market. Furthermore, with over 20 design wins worldwide, the acquired business expands and diversifies Ikanos' customer base. In particular, the Fusiv platform was selected by Sagem to power their range of gateway products, which are shipping in volume to deliver video and voice services to residential subscribers.

"Sagem selected the Fusiv processor for our triple-play gateways because it is the highest performance solution available in the market, and is scalable across a wide range of data, voice, and video services," said Patrick Sevian, Deputy CEO of Sagem Communication. "The future relies on the delivery of HDTV-based video over VDSL, and the Fusiv processor combined with Ikanos' VDSL products is an ideal solution for providing high-value multi-play services."

Upon completion of the transaction, the Ikanos research and development team is expected to grow to approximately 220 engineers, of which about half will be based in India. The acquisition is expected to provide Ikanos with significant networking and processor engineering talent that will complement Ikanos' existing VDSL engineering team.

In addition, Ikanos and Analog Devices expect to continue to cooperate in the future to leverage synergies between the two companies.

For more information please visit: http://www.ikanos.com/