Synaptics Inc SYNA shares are rising in extended trading Tuesday after the company signed a licensing agreement with Broadcom Inc AVGO.

What Happened: After the market close on Tuesday, Synaptics announced it’s accelerating its Edge AI strategy through a definitive licensing agreement with Broadcom.

The agreement includes Wi-Fi 8, ultra-wideband (UWB), Wi-Fi 7, advanced Bluetooth and GPS/GNSS products and technology for IoT and the Android ecosystem.

“Our wireless technology and capabilities are cornerstones of our success in IoT markets,” said Michael Hurlston, president and CEO of Synaptics.

“We are now developing this expertise to enable ecosystems with centralized control and seamless connectivity to a rapidly growing array of Edge AI devices. Our platform history, proven track record, and strategy uniquely position us to integrate Broadcom’s technology and fully deliver on the potential of IoT connectivity.”

Check This Out: Starbucks Q1 Earnings: Revenue Beat, EPS Beat, Memberships Up 1%, ‘Positive Response’ To Turnaround Efforts

Synaptics said the deal is expected to add at least $40 million in annualized sales. The company also expects the transaction to be immediately accretive to adjusted earnings per share.

The all-cash transaction is expected to close on Jan. 30. Financing details were not provided, but Synaptics said it will provide more information on the transaction when it reports second-quarter earnings on Feb. 6.

Analysts currently expect Synaptics to report earnings of 86 cents per share and revenue of $265.14 million for the second quarter, according to Benzinga Pro estimates.

SYNA Price Action: Synaptics shares were up 5.13% in after-hours, trading at $84.66 at the time of publication Tuesday, according to Benzinga Pro.

This illustration was generated using artificial intelligence via Midjourney.