Avago Technologies on Monday announced that it will buy LSI Corp for $6.6 Billion in an all cash deal. LSI, which acquired SandForce a couple of years ago, is one of Silicon Valley's best known name in the semiconductor industry. The deal, which is the industry's second-largest this year, is expected to create a company with annual revenue of around $5 billion.

Avago has joint headquarters in San Jose and Singapore. It became a legal entity in 2005 after the semiconductor operations of Agilent Technologies, originally a part of Hewlett-Packard Co., were bought by Silver Lake and KKR Co. The company went public three years later.

The semiconductor company has once again turned to Silver Lake Partners to help finance the deal. Under the terms of transaction, the US-based private equity firm will invest $1 billion. Another $1 billion payment will be done by Avago, while the remaining amount of $4.6 billion will be paid through bank loans. The company will pay $11.15 a share in cash for LSI and the deal is expected to close during the first half of 2014.

The acquisition of 32-year-old LSI will help Avago move into the world of networks and data center storage – a rising business sector with less competition and healthy returns. Currently, the company designs and develops products for industrial companies, mobile devices and network infrastructure. Avago's client list includes HP, Cisco, Samsung, and more.