17 May 2011

Skyworks to buy SiGe Semiconductor for $210m

Skyworks Solutions Inc of Woburn, MA, USA, which manufactures high-reliability analog and mixed-signal semiconductors, has signed a definitive agreement to purchase SiGe Semiconductor Inc of Andover, MA, USA, a fabless supplier of highly integrated RF front-end solutions enabling wireless connectivity.

SiGe Semiconductor says that its predominant use of standard silicon-based processes and its fabless manufacturing model enables it to achieve high levels of functional integration, leverage the economies of scale of high-volume manufacturing technology, maintain low costs, and accelerate time-to-market. It has shipped more than 750 million front-end solutions since the firm's inception, primarily consisting of Wi-Fi front-end modules and power amplifiers.

Skyworks offers diverse standard and custom linear products supporting automotive, broadband, cellular infrastructure, energy management, industrial, medical, military and mobile handset applications. Its portfolio includes amplifiers, attenuators, detectors, diodes, directional couplers, front-end modules, hybrids, infrastructure RF subsystems, mixers/demodulators, phase shifters, PLLs/synthesizers/VCOs, power dividers/combiners, receivers, switches and technical ceramics.

Skyworks says that the acquisition complements its wide-area front-end solutions by adding SiGe's short-range, silicon-based products, enabling it to offer a comprehensive wireless networking product portfolio supporting all key operating frequencies with architectural flexibility to address a variety of high-growth applications. Specifically, Skyworks immediately expands its addressable content opportunity within several strategic product areas including smart-phones, tablets, gaming consoles, notebook PCs and home automation systems.

“This acquisition is highly complementary in terms of our addressed markets, sales channels, process technologies, design methodologies and baseband partnerships,” says president & CEO David J. Aldrich. “At the same time, the SiGe business presents significant operational and cost synergies, yielding immediate earnings accretion and long-term shareholder value creation,” he adds.

“Skyworks clearly represents the best strategic and cultural fit for SiGe Semiconductor,” comments SiGe Semiconductor’s president & CEO Sohail Khan. “Both companies have a long history of front-end innovation and a shared vision of the future of band-intensive wireless networking,” he adds. “Together, we can develop and deliver products of unprecedented integration and improve our customers' performance in the increasingly connected wireless world.”

Skyworks will pay $210m in cash, plus an additional $65m if certain performance targets are met over the next 12 months. The transaction has been approved by Skyworks’ and SiGe’s boards of directors and is expected to close in June, subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals. Excluding any non-recurring acquisition-related charges and amortization of acquired intangibles, Skyworks expects the acquisition to be immediately accretive to non-GAAP earnings and will finalize estimates of the transaction’s financial impact, as well as the accounting for the transaction, upon the close of the deal.

Skyworks says that SiGe Semiconductor’s diverse product portfolio provides the performance, range and reliability required by 802.11b/g/a/n, Bluetooth, WiMAX, GPS and ZigBee systems. The firm's use of silicon-based semiconductor technologies simplifies the integration of RF signal processing for many leading consumer, commercial and industrial electronics companies. Key SiGe customers include Cisco, Dell, Huawei, Hewlett-Packard, NetGear, Itron, Microsoft, Nintendo, Samsung and Sony.

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