Vitesse to Buy Danish Chip Maker Exbit

Vitesse Semiconductor Corp., which makes chips for fiber-optic equipment, agreed Sunday to buy Danish communications semiconductor maker Exbit Technology for about $104.8 million in stock to add products.

Camarillo-based Vitesse plans to issue about 4.4 million shares to closely held Exbit, the company said in a statement. As many as 2.5 million more Vitesse shares will be reserved for Exbit shareholders if performance goals are met, Vitesse said.

Vitesse expects its purchase to reduce earnings by 1 cent a share per quarter in the second half before expenses, the company’s statement said.

Last week, Vitesse warned that fiscal second-quarter sales and profit will lag behind already reduced forecasts because of weaker demand and canceled orders. It said it expects operating profit of 10 cents or 11 cents a share, half of a March 5 forecast of 21 cents to 22 cents. Revenue will total $120 million to $125 million, rather than an earlier estimate of $150 million to $160 million.

Exbit, based in Herlev, Denmark, has 62 employees, including more than 40 engineers. The purchase is expected to be completed by June 30.

Shares of Vitesse fell 56 cents to close at $23.81 in Nasdaq trading Friday. They’ve fallen 75% in the last year.

Vitesse has been caught in the economic slowdown that has spared few technology companies.

With a number of U.S. companies curtailing technology investments, orders have slowed from large telecommunications and computer-networking equipment companies such as Cisco Systems Inc., Lucent Technologies Inc. and Nortel Networks Corp., which in turn has affected component suppliers such as Vitesse.

Vitesse makes chips that speed data traffic on fiber-optic networks.