Silicon Laboratories Inc. (SLAB) announced Thursday that it has entered into a definitive asset purchase agreement to acquire Redpine Signals’ Wi-Fi and Bluetooth business, development center in Hyderabad, India, and extensive patent portfolio. The cash consideration for the deal is $308 million.
The Redpine Signals acquisition includes an at-scale design center with approximately 200 employees in Hyderabad, India.
The integration of the Redpine Signals technology is expected to accelerate Silicon Labs’ roadmap for Wi-Fi 6 silicon, software and solutions.
Silicon Labs expects the transaction to add approximately $20 million in incremental revenue on an annualized basis for FY2020. The company also expects the deal to enhance its IoT revenue growth rate at comparable gross margin, and to be accretive to earnings per share on a non-GAAP basis in 2H 2021.
The transaction will add approximately $15 million of non-GAAP operating expenses on an annualized basis.
The acquisition is expected to close in the second quarter of 2020, subject to customary closing conditions. The deal has been approved by the boards of directors of both companies and the stockholders of Redpine Signals.
J.P. Morgan Securities LLC served as exclusive financial advisor to Redpine Signals.
Tyson Tuttle, CEO of Silicon Labs, said, “The acquisition of Redpine Signals’ ultra-low-power Wi-Fi and Bluetooth products and extensive intellectual property portfolio will expand our leadership in IoT wireless technology. The addition of these products into our worldwide sales and distribution network will drive further momentum in the smart home, industrial IoT and commercial markets for customers who want to get to market quickly with Wi-Fi enabled connected devices.”
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