Intel Sells Media And Signaling Business

The sale, part of Intel's ongoing restructuring effort in the wake of several consecutive quarters of sluggish earnings, is expected to close in approximately four to six weeks, the company said.

In June, Intel (Santa Clara, Calif.) offloaded its communications and application processor units to Marvell Technology for $600 million. Intel is rumored to be selling off several of its communications chip businesses.

The media and signaling business includes all of the product lines from Intel's Dialogic unit, which has been rumored to be for sale for some time. In June, a potential buyer reportedly backed out of a deal to acquire the unit.

The acquisition also includes Intel's Host Media Processing (HMP) software and HMP-enabled blades as well as the company's line of SS7, PBX integration and gateway solutions.

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Intel said the media and signaling business includes approximately 600 employees. A "significant number" of these employees will presumably become employees of Eicon, Intel said. The companies said they would work together to transition the business in order to continue supporting customers.

Eicon markets a Diva Server line of products, said to be complementary to the acquired technologies. The company simultaneously announced that Investcorp Technology Ventures and Tennenbaum Capital Partners will invest in Eicon, enabling the company to fund the acquisition. The company said it plans to continue to work closely with Intel as an active member of the Intel Communication Alliance.

"Eicon's and Intel's media and signaling products complement each other well," said Nick Jensen, Eicon president and CEO. "We expect this acquisition to extend our global reach with solutions for both traditional circuit switch communication technology and leading-edge IP platforms for both enterprises and service providers."

Intel said the sale of the media and signaling business would enable the company to focus its investments on its core communications and embedded businesses.

"Intel is sharpening its focus on communications and embedded market segments that are aligned with our core businesses," said Anthony Neal-Graves, general manager of Intel's modular communications platform division.

Intel said the sale would not impact its communications infrastructure products for telecommunications equipment manufacturers, including its Advanced Telecom Computing Architecture blades and carrier-grade rack mount servers, as well as its CompactPCI compute blades and chassis.

Last month, Intel eliminated 1,000 managerial jobs. The company later lowered its 2006 forecast after posting sales and earnings for the second quarter that declined both sequentially and from the year-ago quarter. Intel subsequently announced a reorganization. The company is expected to announce additional layoffs when it provides an update of its restructuring initiative later this quarter.