Under the terms of the agreement, which was unanimously approved by the boards of directors of both companies, Ikanos will purchase Conexant's broadband access product line for $54 million in cash and the assumption of certain employee and facility related liabilities.

In connection with this transaction, Tallwood Venture Capital has agreed to purchase 24 million shares of Ikanos common stock for $42 million, or $1.75 per share. Tallwood will also receive warrants to purchase an additional 7.8 million shares of common stock at $1.75 per share. The warrants will have a term of five years. Upon completion of the transactions, Tallwood Venture Capital will own approximately 45% of the outstanding shares of Ikanos (excluding the warrants).

In addition, following the transaction, George Pavlov, general partner, and Dado Banatao, managing partner, will join Ikanos's board of directors.

Ikanos expects that the transaction will more than double the company's revenue, while providing significant leverage in its cost and spending structure.

Michael Gulett, president and CEO of Ikanos, said: "With the number of home networks doubling to more than 400 million by 2013 according to analysts, there's a substantial opportunity for Ikanos to address the need for delivering bandwidth to and throughout the home. We'll use our strengthened leadership in broadband access as a platform on which to build new offerings that extend multi-play services seamlessly everywhere they are needed."

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