Thursday, June 04, 2009

Intel to Acquire Wind River Systems

What Happened?

In a mammoth, $884 million deal, Intel (NASDAQ: INTC) announced its intent to acquire Wind River Systems (NASDAQ: WIND). The aggregate price tag puts approximately a 44% premium over the June 3rd closing price of $8.00 per share for WRS common stock.

After this acquisition, which is expected to close this summer, Wind River would operate as a wholly owned subsidiary of Intel and report into its Software and Services Group.

VDC’s View

This acquisition signifies a strategic extension of the partnership that Intel has been strengthening with WRS over recent years, as Intel has been attempting to extend its reach into more resource constrained, deeply embedded devices and as WRS has been positioning itself as a leading provider of software solutions for multi-core architectures.

Beyond the promise of offering enhanced system integration and faster time-to-market to their customers, VDC expects that this acquisition offers Intel the critical core competencies to expand its business within the mobile device segment. The maturation of Wind River's product and service offerings targeted at this device class - especially with respect to Linux - should help Intel better serve a mobile industry that has long been dominated by ARM IP-based silicon.

Stay tuned as VDC looks to comment further on any additional news.