Semiconductor business Mindspeed says the transaction will create the ‘clear market leader’ in small cell base station products for mobile broadband communications.

Picochip supplies integrated system-on-chip (SoC) products which integrate components of a computer or other electrical system into a single chip.

The deal is worth an initial $51.8 million, with the remaining $25 million payable in the form of a potential earnout payment due in the first quarter of 2013.

Raouf Halim, chief executive officer of Mindspeed, says that the purchase establishes the US-headquartered company as a ‘global leader’.

He adds: ‘It is a great strategic fit as it enhances our competitive position as we join our respective 3G/4G technologies to offer single- and multi-mode solutions.’

Mindspeed has lowered its first-quarter revenue guidance to $33.3 million from its previous view of $35.9-$37.5 million.

Nigel Toon, chief executive officer and president of Picochip, says that Mindspeed represents the ‘ideal acquirer’ for the UK technology business.

‘Our combined resources create one of the largest SoC development groups in the wireless infrastructure sector with complementary intellectual property scale and expertise to deliver the solutions that this fast-moving market demands.’