Avago Technologies is a semiconductor company that has agreed to acquire storage and networking company LSI for $6.6 billion. Avago will pay with $1 billion in cash, $1 billion in equity by Silver Lake Partners, $4.6 billion in term loans from banks. The combined companies will grow in the data center business and see their mobile traffic increase rapidly. Because of mobile traffic, they have seen an increase for the demand of networking equipment.
Avago is known for build equipment like actuators and microelectromechanical systems (MEMS), which is used in industrial, auto, lighting, and consumer equipment.
LSI designs hardware equipment for data centers such as flash storage and controllers. Through the acquisition of LSI, Avago will be able to expand their offerings in the wired infrastructure of data centers.