Silicon Valley's Other Craig (Barratt) Cashes In

January 6, 2011 at 4:01 AM UTC

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If conventional wisdom had its way, Atheros Communications (ATHR) would have ended up as yet another mound of chip startup roadkill. Not only did it seek to do something new, risky, and expensive with its wireless chip offerings, but it brushed up against Intel (INTC) and its near-bottomless coffers. Far from going on life support, Atheros survived—and did well enough to tempt Qualcomm (QCOM) into acquiring it for $3.1 billion in cash.

After a day of rumors, Qualcomm confirmed the purchase on Jan. 5. It paid $45 per share, a 29 percent premium over Atheros' average trading price during the last month. The deal is Qualcomm's biggest ever and gives the mobile technology giant a direct path to expansion in a number of growing markets, including Wi-Fi, Bluetooth, GPS, and systems that let Internet data flow through home electrical networks, known as powerline networking.