Intel Corp. on Thursday said that it had entered into a definitive agreement to acquire Wind River Systems, an embedded software vendor. The world’s largest maker of chips hopes that acquisition of the software company will help it to find new customers for its embedded products.

“This acquisition will bring us complementary, market-leading software assets and an incredibly talented group of people to help us continue to grow our embedded systems and mobile device capabilities. Wind River has thousands of customers in a wide range of markets, and now both companies will be better positioned to meet growth opportunities in these areas,” said Renee James, Intel vice president and general manager of the company's software and services group.

Under the agreement, Intel will acquire all outstanding Wind River common stock for $11.50 per share in cash, or approximately $884 million in the aggregate. Wind River is a leading software vendor in embedded devices, and will become part of Intel's strategy to grow its processor and software presence outside the traditional PC and server market segments into embedded systems and mobile handheld devices. Wind River will become a wholly owned subsidiary of Intel and continue with its current business model of supplying leading-edge products and services to its customers worldwide.

The acquisition will deliver to Intel robust software capabilities in embedded systems and mobile devices, both important growth areas for the company. Embedded systems and mobile devices include smart phones, mobile Internet devices, other consumer electronics (CE) devices, in-car "info-tainment" systems and other automotive areas, networking equipment, aerospace and defense, energy and thousands of other devices. This multi-billion dollar market opportunity is increasingly becoming connected and more intelligent, requiring supporting applications and services as well as full Internet functionality.

As an Intel subsidiary, Wind River will continue to develop commercial-grade software platforms that support multiple hardware architectures that are optimized for the needs of its many embedded and mobile customers. The acquisition will boost Wind River's Intel-architecture focused sales as it gains access to the company's technology investments, brand, employees and global sales force.

Wind River develops operating systems, middleware (software found between an OS and software application), and software design tools for a variety of embedded computing systems. Its main products include VxWorks, the market-leading proprietary and multicore-ready real-time operating system, and commercial-grade Linux software platforms. The company also provides design services and software expertise, including custom-built solutions, development tools and device testing products.

With thousands of customers, Wind River technology is relied upon by most major computer and networking communications companies, and used by corporations and government agencies such as Alcatel-Lucent, BMW, Boeing, Bombardier Transportation, Mitsubishi, Motorola, NASA, Sony, Verizon and many more.

Founded in 1981, Wind River is a publicly held company with headquarters in Alameda, California, with more than 1600 employees and operations in more than 15 countries. During its fiscal year ended Jan. 31, 2009, Wind River reported annual revenues of $359.7 million.

The board of directors of Wind River has unanimously approved the transaction. It is expected to close this summer, subject to certain regulatory approvals and other conditions specified in the definitive agreement.

Tags: Intel, Wind River Systems