As part of the acquisition, approximately 150 former NXP employees and the assets associated with selected NXP advanced CMOS libraries, IP blocks and SoC infrastructure along with other classes of semiconductor IP, including approximately 25 associated patent families, are now part of Virage Logic.

The strategic alliance between the two companies also includes a multi-year, $60 million licensing and IP development relationship that further executes on NXP's strategic vision to achieve leadership in high performance mixed signal and enables them to significantly reduce costs without compromising design capability.

"This acquisition and strategic alliance underscore the fundamental shift we are seeing in the global semiconductor industry and that is to focus on core competencies and engage with trusted partners for the non-differentiating elements of a company's business," said Dr. Alex Shubat, president, CEO and co-founder of Virage Logic. "Virage Logic was founded on this vision over a decade ago and today over 400 customers rely on our extensive semiconductor IP portfolio to provide the critical building blocks for their SoC designs as they develop their next generation products."

Dr. Shubat continued, "Over the last two years, we have been aggressively executing on our strategic initiative to broaden our IP product portfolio through both organic and inorganic growth. Our recent acquisition of ARC International and the announcement with NXP are a testament to the strong progress we have made in establishing ourselves as a broad line, trusted IP provider. We look forward to the key contributions the talented NXP technologists bring to Virage Logic as we further expand our IP portfolio."

Virage Logic will establish an R&D center in Eindhoven to develop new products based on the acquired advanced CMOS I/O, analog mixed signal and System-on-Chip (SoC) infrastructure IP and to provide on-going support to NXP. These new products, expected to be commercially available in early 2011, will expand upon Virage Logic's already extensive product offering that includes processor solutions, interface IP solutions, embedded SRAMs and NVMs, embedded memory test and repair, logic libraries, and memory development software.

In consideration for the assets, NXP received 2.5 million shares of Virage Logic common stock, which are subject to transfer restrictions, and will receive a share of the future revenue generated by Virage Logic from licensing the transferred IP portfolio. Virage Logic expects the transaction to be accretive in the company's fourth fiscal quarter of 2010.

Virage Logic is a leading provider of both functional and physical semiconductor Intellectual Property for the design of complex integrated circuits.