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Entropic Communications agrees to acquire Arabella Software Ltd.
Arabella expands Entropic's Linux and Embedded Software Capabilities

SAN DIEGO, Calif. and Kfar-Saba, Israel., March 7, 2007  --- Entropic Communications, the leader in connected home entertainment semiconductor systems, today announced that it has signed a definitive agreement to acquire Arabella Software Ltd, a privately-held software company based in Israel, specializing in the design and development of highly optimized embedded Linux software.

Arabella provides a complete range of integrated open-source applications that are ideally suited for many embedded applications. These span areas such as security (IPsec, firewalls, etc), management (SNMP, HTTP and other), high-availability frameworks (including full system redundancy schemes) and powerful diagnostics tools, all based on our customization of standard open-source tools.

"By acquiring Arabella, Entropic is strengthening its software capabilities in core areas," said Patrick Henry Entropic President and CEO. "Furthermore, we will be well positioned to take advantage of its location to continue to build our off shore R&D capabilities."

"The Arabella team has a great depth of experience in hardware/software integration, device drivers and communication protocols spanning Ethernet, IP, ATM, Frame Relay and more as well as many combined years of development in the open source environment," said Anton Monk Entropic founder and CTO. "By combining our leading communication software with Arabella's engineering talent in a broad range of applications including advanced switching, QoS and security management, we will significantly increase our ability to bring complete solutions to market faster."

With its industry-leading position in home entertainment networking, Entropic offers an ideal complement to Arabella's embedded application expertise based on open-source software," said Jonathan Masel, President and CEO of Arabella. "We look forward to joining the Entropic team and to the opportunity to further extend Entropic's leadership position in home entertainment networking."

The boards of directors of each of the companies and the stockholders of Arabella have approved the merger. The closing, which is expected to occur during the first quarter ending March 31, remains subject to customary closing conditions.  Terms of the deal were not disclosed.

About Arabella Software

Arabella Software specializes in providing "Customized Linux and Microcode Solutions'' for embedded applications based on its Customized Linux distribution together with proprietary add-ons. The combination of these components creates a truly unique and highly optimized solution. Additionally, Arabella offers expert customization and support services through its team of top engineers, each boasting over 10 years of experience in working with integrated processors, communications applications and open source environments.

About Entropic Communications

Entropic Communications, Inc., is the leading developer of LAN and WAN coax networking for home digital entertainment. Entropic's products allow consumers to easily share digital entertainment throughout the home by leveraging the existing coax infrastructure to fundamentally change the way content such as movies, music, and images are stored and networked by the average user.  For more information visit www.entropic.com.

John Graham
VP Marketing
Entropic Communications
858/829-1691
jgraham@entropic.com

Rob Gelphman
Gelphman Associates
408/451-8420
robert@gelphman.com