Virage To Acquire Chip Maker ARC

FREMONT, Calif. (AP) -- Chip design software maker Virage Logic Corp. said Tuesday it's buying ARC International PLC for $41 million in cash.

Shareholders of publicly held ARC would get 16.25 pence per share, or 27 cents, for a value of 25.2 million pounds. The deal, which is expected to close by the end of the year, calls for at least 90 percent of ARC shares to accept the offer, plus customary closing conditions.

The acquisition is projected to add 10 to 14 cents per share to Virage's fiscal 2010 earnings, excluding stock compensation expenses, restructuring and other one-time items. After the deal closes, Fremont, Calif.-based Virage expects to have $20 million to $23 million in cash left.

U.K.-based ARC makes chips that go into portable media players, digital cameras and other devices that enable multimedia content to be recorded, shared and played. It recorded $24 million in revenue for the 12 months ended June 30 and serves more than 150 corporate clients.

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