Synaptics Incorporated (NASDAQ:SYNA), the leading developer of
human interface solutions, today announced that it has signed a
definitive agreement to acquire Conexant Systems, LLC, a technology
leader in voice and audio processing solutions for the smart home.
Synaptics also announced the signing of a definitive agreement to
acquire the Multimedia Solutions Business of Marvell Technology
Group (NASDAQ:MRVL), a leading provider of advanced processing
technology for video and audio applications, also for the smart
home. Both organizations have strong technology and market
positions, and Synaptics believes the combination will immediately
jumpstart its presence in the smart home market. The acquisitions
are part of Synaptics’ long term strategy to extend its human
interface leadership into the consumer IoT era. With the
acquisitions, Synaptics expects gross margins to be accretive
immediately and to increase its total addressable market
opportunity by 38 percent or $2.8 billion to $10.3 billion by 2020.
“At Synaptics, we have a knack for bringing the right
technologies to the right growth markets, and adding voice and
video processing solutions to our portfolio blends perfectly into
the company’s innovative technology product mix,” said Rick
Bergman, President and CEO, Synaptics. “These acquisitions provide
Synaptics the industry’s broadest portfolio of human interface
solutions and rapidly accelerates the execution of our consumer IoT
strategy, driving our next major phase of growth. The acquisitions
are expected to add significant revenue, strong margins, new
tier-one customers, an increasingly diverse customer base,
impressive global talent, and a deep portfolio of intellectual
property.”
“Synaptics has a long history of delivering products that drive
industry inflection points, which presents an exciting opportunity
for us,” said Jan Johannessen, CEO, Conexant. “Our voice and audio
processing solutions are enabling an entirely new category of
digital personal assistants, and joining forces with Synaptics will
help us further disrupt the emerging and growing consumer IoT
ecosystem. The two companies share a common vision of investing
with partners and customers to deliver powerful human interface
solutions for a variety of applications.”
Voice is one of the most exciting and fastest growing human
interface modalities today. Conexant, with a portfolio of more than
480 patents granted or pending, is a leading provider of far-field
voice solutions with more than 27 million units shipped. Conexant’s
voice processing solutions have been featured in more than 60
different products, including a variety of home audio/video
applications and home automation devices. In addition to its voice
solutions, Conexant is helping the headphone industry go digital
with its USB-C CODEC solutions for next generation hearables and
wearables.
Marvell’s multimedia product family combines sophisticated video
and audio processing solutions with an extensive IP portfolio that
capitalizes on consumer’s paradigm shift to on-demand immersive
media consumption. Marvell’s advanced media processing technology,
coupled with deep content security capabilities, is fundamental to,
and deployed in set-top boxes, over-the-top (OTT) streaming media
devices that deliver content over the internet, virtual/augmented
reality platforms, and digital personal assistants such as smart
speakers.
“We’re really excited to join Synaptics and help innovate for
the fast-growing consumer IoT market where we can leverage our
advanced technologies, broad ecosystem partners, and top-tier
customer base,” said Gaurav Shah, current vice president of
Marketing and Strategy for the Multimedia Solutions Business of
Marvell Technology Group. “Together our complementary technologies
and talented global teams are capable of delivering solutions that
drive a new generation of smart home products.”
Conexant Systems, LLC Transaction Details:
Subject to certain purchase price adjustments, the consideration of
the transaction is approximately $300 million in cash and 726,666
shares of Synaptics’ common stock.
For the year ended September 30, 2016, Conexant’s net revenue
was approximately $104 million. Synaptics expects the transaction
to be accretive to the Company's Non-GAAP earnings per share in the
first year following the close, excluding transaction related
expenses. The acquisition is expected to close in the third
calendar quarter of 2017, subject to customary closing conditions
and regulatory clearance under the Hart-Scott-Rodino Act.
Marvell Multimedia Solutions Business Transaction
Details: The all-cash transaction is valued at
approximately $95 million.
For the year ended January 28, 2017, the Multimedia Solutions
Business of Marvell Technology Group net revenue was
approximately $94 million. Synaptics expects the transaction to be
accretive to its Non-GAAP earnings per share in the first year
following the close, excluding transaction related expenses. The
acquisition is expected to close in the third calendar quarter of
2017, subject to customary closing conditions.
Synaptics intends to fund the transactions through a combination
of cash and debt financing.
Winston & Strawn advised Synaptics in both transactions.
Updated Fourth Quarter Fiscal 2017 Revenue
Guidance: Synaptics also announced that it expects revenue
for the fourth quarter of fiscal 2017 to be in the range of $420
million to $430 million, slightly below the mid-point of its
previously provided guidance range of $410 to $450 million.
Investor Call: Synaptics will host a
teleconference and webcast at 2:00 p.m. Pacific Time (5:00 p.m.
Eastern Time) today, Monday, June 12, 2017, to provide additional
commentary regarding the acquisitions, during which the company may
provide forward-looking information. To participate on the live
call, analysts and investors should dial 1- 888-352-6793
(conference ID: 8255028) at least ten minutes prior to the call. A
telephonic replay of the conference call will also be available
until 4:00 p.m. Pacific Time on Saturday, June 17, 2017, by dialing
1-888-203-1112 and entering the conference ID: 8255028.
Synaptics will also offer a live and archived webcast of the
conference call, accessible from the "Investor Relations" section
of the company's Website
(http://investor.shareholder.com/synaptics/). The acquisition
presentation, that will be referred to on the conference call, can
also be found in the “Investor Relations” section of the company’s
website.
Forward Looking Statements: This press release
contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements, including, without limitation, statements regarding
updated revenue guidance for the fourth quarter of fiscal 2017,
statements about the proposed acquisitions by Synaptics, the
expected closing date of the acquisitions, the potential benefits
of the proposed acquisitions, the expectations that the
acquisitions will be accretive in the first year following the
closing of such acquisitions, and the anticipated operating
synergies, relate to Synaptics Incorporated’s current expectations,
beliefs, projections and similar expressions concerning matters
that are not historical facts and are not guarantees of future
performance. Forward-looking statements involve uncertainties,
risks, assumptions and contingencies, many of which are outside
Synaptics Incorporated’s control that may cause actual results to
differ materially from those described in or implied by any
forward-looking statements. All forward-looking statements are
based on currently available information and speak only as of the
date on which they are made. Synaptics Incorporated assumes no
obligation to update any forward-looking statement made in this
press release that becomes untrue because of subsequent events, new
information or otherwise, except to the extent it is required to do
so in connection with its ongoing requirements under Federal
securities laws. For a further discussion of factors that could
cause Synaptics Incorporated’s future results to differ materially
from any forward-looking statements, see the section entitled "Risk
Factors" in Synaptics Incorporated’s Annual Report on Form 10-K for
the year ended June 25, 2016 and other risks described in documents
filed by Synaptics Incorporated from time to time with the
Securities and Exchange Commission.
Non-GAAP Financial Measures: This press release
includes references to Non-GAAP earnings per share, which is
Non-GAAP earnings divided by the weighted average of the number of
shares of the company’s common stock outstanding during the
applicable period. The company refers to this Non-GAAP financial
measure because it considers it an important supplemental measure
of its performance because it facilitates operating performance
comparisons from period to period by eliminating potential
differences in earnings caused by the existence and timing of
share-based compensation charges, acquisition related costs, and
certain other non-cash or recurring and non-recurring items.
Non-GAAP earnings per share has limitations as an analytical tool
and should not be considered in isolation or as a substitute for
the company's GAAP earnings per share. Further, Non-GAAP earnings
per share, as determined and presented by Synaptics, may not be
comparable to related or similarly titled measures reported by
other companies.
About Synaptics: Synaptics is the pioneer and
leader of the human interface revolution, bringing innovative and
intuitive user experiences to intelligent devices. Synaptics’ broad
portfolio of touch, display, and biometrics products is built on
the company’s rich R&D, extensive IP and dependable supply
chain capabilities. With solutions designed for mobile, PC and
automotive industries, Synaptics combines ease of use,
functionality and aesthetics to enable products that help make our
digital lives more productive, secure and enjoyable. (NASDAQ:SYNA).
Join Synaptics on Twitter, LinkedIn, and Facebook, or visit
www.synaptics.com.
Synaptics, and the Synaptics logo are trademarks of Synaptics in
the United States and/or other countries. All other marks are the
property of their respective owners.
About Conexant Systems, LLC: Conexant Systems,
LLC, is the industry’s go-to source for hardware and software
solutions that offer unrivaled performance for audio and voice
applications. The company combines its significant IP portfolio in
DSP, analog and mixed signal technology with embedded software to
enrich and expand audio and voice capabilities of products across
nearly every vertical of the CE space. Founded in 1999, Conexant is
a privately-held fabless semiconductor and audio technology
engineering company headquartered in Irvine, California with
offices and design centers worldwide.
About the Multimedia Solutions Business of Marvell
Technology Group: Marvell's multimedia processors are
driving advancements in the connected home. By leveraging Marvell’s
established expertise in high-performance, power-efficient chip
design, Marvell’s multimedia solutions enable rich multimedia,
seamless connectivity, and customized experiences on the
next-generation of home entertainment devices. Marvell’s multimedia
products include powerful single-chip 4K/HD media processors for
TVs, set-top boxes, and OTT streaming devices.
For further information, please contact:
Ann Minooka, Synaptics Inc.
+1-408-904-1673
ann.minooka@synaptics.com
Investor Contacts:
Ralph Fong
The Blueshirt Group
415-489-2195
ralph@blueshirtgroup.com
Jennifer Jarman
The Blueshirt Group
415-217-5866
jennifer@blueshirtgroup.com
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