Nvidia announced today that it has agreed to acquire Icera, which creates baseband processors for 3G and 4G cellular phones and tablets, for $367 million in cash. Both companies' boards of directors have approved the transaction and are expecting it to be completed, subject to customary closing conditions, in approximately 30 days.

Founded in 2002 and based in Bristol, England, Icera has approximately 300 employees in seven countries. The company has more than 550 patents granted or pending worldwide, and its high speed wireless-modem products have been approved by more than 50 carriers across the globe.

Nvidia explains it is acquiring Icera because it wants to enhance its position as a leading player in the growing mobile market by offering the two main processors used in smartphones (the application processor and baseband processor). This will make it easier for OEM customers to satisfy their requirements for next-generation mobile products by having to work with one less company.

The deal also means Nvidia will approximately double its revenue opportunity within each device. The market for baseband processors is one of the fastest growing segments of the technology industry, worth an estimated $15 billion in 2010. Icera will be able to leverage NVIDIA's momentum in the smartphone and tablet markets to capitalize on this growth.

Iceras' custom-built wireless baseband processors with RF components scale from 2G to 4G networks. Because the baseband is software-based, the company insists manufacturers can develop multiple products from a common platform, reduce development costs, accelerate time to market, and secure a route to support future baseband standards.

"NVIDIA's Tegra processor has the most impressive roadmap in the industry, and it is an ideal match for Icera," Stan Boland, President and CEO of Icera, said in a statement. "As part of NVIDIA, we will be able to reach a broader market. Our team has collaborated closely with NVIDIA for several years on a range of projects, and we're delighted to be joining forces."