Campbell, CA - July 11, 2000 -- PMC-Sierra, Inc. (NASDAQ:PMCS) and Quantum Effect Devices, Inc. (NASDAQ:QEDI) today announced that they have entered into a definitive merger agreement. Based on today's closing price, PMC-Sierra shares with a value of approximately $2.3 billion will be issued to QEDI stockholders at an exchange ratio of 0.385 PMCS shares per QEDI share. The transaction will be accounted for as a pooling of interests and is subject to the satisfaction of customary closing conditions, including QEDI stockholder approval and expiration of the regulatory waiting period.
MIPS® is the processor of choice for networking
"Quantum Effect Devices is a leading provider of MIPS® processors for networking applications," said Bob Bailey, PMC-Sierra's chairman and CEO. "This is one of the most widely adopted architectures in the broadband infrastructure and is a synergistic addition to our rapidly expanding offering of broadband communications semiconductors. QED's products are very complementary to PMC-Sierra's solutions for the access and core infrastructure applications which include our recent acquisitions of several DSP-based technology companies," Bailey noted. "As the power of processors increase, they will become more commonplace in the line cards of routers and switches. With this acquisition, PMC-Sierra will now be positioned to provide more of the critical silicon for these applications including an open architecture microprocessor."
"We are pleased to join forces with a broadband communications leader like PMC-Sierra," said Tom Riordan, president and CEO of Quantum Effect Devices. "This acquisition is extremely strategic for both companies as we combine our MIPS® processor expertise with PMC-Sierra's product line to offer a more comprehensive broadband communications semiconductor solution for all of our customers."
The Quantum Effect Devices team of over 100 employees will join PMC-Sierra as a new business unit within the company. Tom Riordan will report to Bob Bailey as vice president and general manager of the new business unit.
About PMC-Sierra
PMC-Sierra's extensive family of broadband communication semiconductors is enabling the equipment that makes up the backbone of the Internet. The company develops Internet Protocol (IP), ATM, SONET/SDH, T1/E1/T3/E3, Voice-over-Packet and wireless infrastructure solutions for wide area network and Internet infrastructure equipment. PMC-Sierra's quality system is registered with the Quality Management Institute to the ISO 9001 standard. As co-founder of the SATURN® Development Group, PMC-Sierra works with over 30 other member companies to define and develop interoperable, standard-compliant solutions for high speed networking applications.
PMC-Sierra offers worldwide technical and sales support including a network of offices throughout North America, Europe and Asia. PMC-Sierra is publicly traded on the Nasdaq Stock Market under the symbol "PMCS". The company is included in the Nasdaq-100 Index (NDX) which contains the largest non-financial companies on the Nasdaq Stock Market. The Nasdaq-100 Index is the benchmark for the Nasdaq-100 Index Tracking Stock (Amex:QQQ). For more information about PMC-Sierra, visit www.pmc-sierra.com.
About Quantum Effect Devices
Quantum Effect Devices, Inc., founded in 1991, designs, develops and markets high-performance, cost-effective, market-driven embedded microprocessor solutions. QED's RM5200 and RM7000 product families include 32- and 64-bit embedded microprocessors targeted at fast-growing communications markets including Internet access devices, routers, switches, optical transport systems and other high-speed networking applications.
Forward-Looking Statements are omitted