LSI Announces Agreement to Acquire Tarari, Inc.

MILPITAS, CA - LSI Corporation (NYSE: LSI) announced today that it has signed a definitive agreement to acquire Tarari, Inc., for approximately $85 million in cash. Tarari is an award winning, privately held maker of silicon and software that provides content and application awareness in packet and message processing, enabling a new class of advanced security and network control for service provider and enterprise networks. Tarari is based in San Diego, Calif. and has approximately 45 employees.

Tarari products enable high levels of performance for content-aware networking applications such as anti-virus, anti-spam, intrusion detection and prevention, XML security and advanced network control. Additional services include compression, cryptography and encoding for a wide variety of applications.

"Through the acquisition of Tarari, LSI will now add best-in-class content processing capabilities to our broad portfolio of networking and storage solutions," said Jeff Richardson, LSI executive vice president, Network & Storage Products Group (NSPG). "These new capabilities will allow service providers and enterprises to deliver advanced services like security, telepresence, unified access, and video over nextgeneration networks."

"In 2006 and 2007, Tarari emerged as the clear market and technology leader in content-inspection accelerators," said Bob Wheeler, senior analyst at The Linley Group. "The addition of Tarari strongly positions LSI with a real opportunity to set a new standard for converged networking security and control."

Upon closing, the Tarari team and products will be integrated into the NSPG organization reporting to Richardson.

"The Tarari team has achieved customer and technical success by focusing on the critical market need for security and content processing", said Randy Smerik, Tarari president, CEO and co-founder. "We're pleased and excited to join forces with such a well-recognized innovator and leader as LSI and Tarari's expertise is a natural complement to their strengths in networking and storage silicon, systems and software. The combination will position us to deliver a richer, more scalable set of solutions to our industry-leading customers."

The transaction is expected to close in the fourth quarter, subject to the satisfaction of customary closing conditions.

Forward Looking Statements: This news release contains forward-looking statements that are based on the current opinions and estimates of management. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forwardlooking statements. Factors that could cause LSI's actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to: the challenges and costs of integrating and restructuring our operations and achieving anticipated synergies following our recent acquisition of Agere Systems; a delay in the closing of the sale of our mobility business to Infineon Technologies; our ability to successfully and timely transition our assembly and test operations to third parties; fluctuations in the timing and volumes of customer demand; our reliance on major customers and suppliers; our ability to compete successfully in competitive markets; our ability to keep up with rapid technological change; the unavailability of appropriate levels of manufacturing capacity; and general industry and market conditions. For additional information, see the documents filed by LSI with the SEC, and specifically the risk factors set forth in the company's most recent reports on Form 10-K and 10-Q. LSI disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

About LSI
LSI Corporation (NYSE: LSI) is a leading provider of innovative silicon, systems and software technologies that enable products which seamlessly bring people, information and digital content together. The company offers a broad portfolio of capabilities and services including custom and standard product ICs, adapters, systems and software that are trusted by the world's best known brands to power leading solutions in the Storage, Networking and Mobility markets. More information is available at www.lsi.com.

About Tarari, Inc.
Tarari, the leader in deep content inspection silicon, is headquartered in San Diego, Calif., USA. Tarari designs and develops Content Processor silicon to allow original equipment manufacturers (OEMs) to accelerate and offload compute-intensive, complex algorithms used in XML/Web Services, Network Security and Digital Media environments. A fabless semiconductor company whose product line primarily includes ASICs, Tarari also offers boards and software acceleration components designed for network equipment, multi-media workstations, appliance and server vendors, as well as independent software vendors. Tarari is a privately held company with venture backing from Crosspoint Venture Partners, Morgan Stanley Venture Partners, Enterprise Partners Venture Capital, Miramar Venture Partners, XMLFund and Intel Capital. For more information, visit www.tarari.com, e-mail: [email protected] or call 858-385-5131.