China's Spreadtrum Communications Inc. has entered into a definitive agreement to acquire Quorum Systems Inc., a fabless semiconductor company that specializes in the design of CMOS radio frequency transceivers.

Under terms of the agreement, Spreadtrum will pay $55 million in cash and $15 million in stock to Quorum's shareholders, with up to an additional $6 million in cash for performance based earn-outs expected to be achieved over the next two years.

Spreadtrum (Shanghai) is a fabless semiconductor company that designs, develops, and markets baseband processor solutions for the mobile wireless communications market.

Spreadtrum's President and CEO, Ping Wu, said the move expands its offerings in the marketplace. "We believe Quorum's RF technology, combined with our strengths in complete baseband and software solutions, will allow us to strengthen our position in the competitive mobile wireless communications market, from 2G to 3G, from RF to baseband, from physical layer software to protocol and applications," he said in a statement.

The boards of directors of both companies and the shareholders of Quorum (San Diego) have approved the definitive agreement. The transaction, which is subject to review by the Committee on Foreign Investment in the United States and customary closing conditions, is expected to close by December 31.