AUSTIN, Texas, April 22, 2021 /PRNewswire/ --
Highlights:
- Skyworks Solutions
will acquire the Infrastructure and
Automotive business of Silicon Labs for $2.75 billion
- Transaction accelerates company's IoT market
leadership and growth
- Silicon Labs intends to return approximately $2.0
billion to shareholders post-closing
- Strategic transaction unlocks significant
shareholder value
Silicon Labs (NASDAQ: SLAB) announced today the
company has entered into a definitive asset
purchase agreement to sell its Infrastructure &
Automotive (I&A) business to Skyworks Solutions,
Inc. (NASDAQ: SWKS) for $2.75 billion in all-cash consideration. The
transaction includes Silicon Labs' power/isolation, timing and
broadcast products, intellectual
property and associated employees. Silicon Labs and
Skyworks will collaborate to ensure a seamless transition for
customers, suppliers and employees.
"The outcome of this deal is a measurable testament
to the industry-leading solutions and strong financial
performance the world-class infrastructure and
automotive team delivered the last 25
years," said Silicon Labs CEO Tyson
Tuttle.
Silicon Labs expects to receive an estimated $2.3 billion in net proceeds after
taxes and transaction fees. The company intends to
return approximately $2.0 billion to shareholders
through a combination of special dividends
and/or share repurchases after the transaction
closes. The boards of directors of both companies have
approved the transaction, which is expected to close in the third
quarter of 2021 subject to customary closing conditions and
regulatory approvals in various jurisdictions. The company
does not believe this transaction will require regulatory approval
in China. The proceeds provide an ideal opportunity for
Silicon Labs to return value directly to its shareholders, while
also increasing the ability to fully participate in the
strong, expected IoT market growth.
Today, the company also provided preliminary
revenue results for the first quarter ended April 3, 2021.
Silicon Labs expects total Q1 revenue to be approximately
$255 million.
This represents an increase
of roughly 5 percent sequentially
and 19 percent year-over-year with the
forecasted upside primarily due to solid growth in IoT,
continued strength in bookings, and durable demand
trends.
Accelerating IoT Market Leadership
Silicon Labs' two businesses, IoT and I&A, are
fundamentally different – each with unique markets, customers,
supply chains, R&D, and go-to-market
strategies. After executing the
I&A divestiture, Silicon Labs will be
a pure-play leader of intelligent, wireless
connectivity for the IoT. The company's resulting focus on IoT
comes at a time when the overall market and Silicon Labs' growth
opportunities are accelerating, as industry projections anticipate
a multi-year ramp in connected devices.
"The massive growth in connected devices makes this the right
time for us to exclusively focus on the large, diverse, growing IoT
opportunity," said Silicon Labs CFO John
Hollister. "Our updated operating model for the IoT business
indicates a long-term revenue growth rate of
20 percent, outpacing the forecasted industry CAGR of
mid-teens for our combined target IoT end markets of Industrial
& Commercial and Home & Life."
With the investments Silicon Labs is making in the IoT business,
the company expects to drive sustainable growth and deliver
long-term 20-25 percent non-GAAP operating margin,
demonstrating the inherent leverage potential as a standalone
IoT-focused company.
Delivering Unmatched Wireless
Technology
Silicon Labs possesses the industry's most comprehensive
wireless portfolio, supporting the widest range of protocols,
including Bluetooth, proprietary, Thread, Wi-Sun, Wi-Fi, Zigbee and
Z-Wave, and major ecosystems, such
as Amazon, Google, Tuya and Xfinity. Built
on an integrated hardware and software platform specifically
designed for IoT development, the company's connectivity
solution is the only wireless IoT offering to
achieve ARM's security PSA Level 3
certification.
"We're more than a semiconductor company – our
hardware, software, tools and partnerships are designed to help IoT
businesses get to market quickly with the world's most secure,
intelligent, energy-efficient edge devices," said Silicon Labs
president, Matt Johnson. "Focusing efforts and resources on
IoT enables Silicon Labs to gain valuable operating
efficiencies and ROI. Our team will develop advanced
innovations faster and provide a superior user
experience no matter the customer's wireless protocol,
ecosystem, application or embedded expertise level."
Driving the Future of IoT
Silicon Labs has developed the industry's most
comprehensive IoT ecosystem, serving tens of thousands of
customers, thousands of applications and hundreds of leading
partners, including organizations defining the next wave
of technology such as Project Connected Home
over IP and Amazon Sidewalk.
"We believe the growing demand indicates
the power of the IoT to deliver real,
measurable value, transforming industries,
growing economies and improving lives," said
Tuttle. "Customers are using our solutions to build a smarter,
more sustainable, and more connected world."
Conference Call and Webcast
Silicon Labs will host a conference call and webinar
on Thursday, April 22, 2021,
at 4:30 p.m. CST. To join, visit
silabs.com/investors or call 1-844-701-1167 (domestic) or
+1-412-317-6710 (international). Replays will be available on
silabs.com. The replay dial-in number is 1-877-344-7529 (domestic)
or +1-412-317-0088 (international) using pass code
10155491.
Advisors:
Qatalyst Partners served as the exclusive financial advisor to
Silicon Labs and DLA Piper served as the company's legal
advisor. Matthews South is serving as capital
markets advisor. JP Morgan is acting as the exclusive
financial advisor to Skyworks and Jones
Day is acting as legal advisor, with Steptoe & Johnson
advising on certain legal matters.
About Silicon Labs
Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon,
software and solutions for a smarter, more connected world. Our
award-winning technologies are shaping the future of the Internet
of Things, Internet infrastructure, industrial automation, consumer
and automotive markets. Our world-class engineering team creates
products focused on performance, energy savings, connectivity and
simplicity. silabs.com
About Skyworks Solutions
Skyworks Solutions, Inc. is empowering the wireless networking
revolution. Our highly innovative analog semiconductors are
connecting people, places and things spanning a number
of new and previously unimagined applications within the
aerospace, automotive, broadband, cellular infrastructure,
connected home, industrial, medical, military, smartphone, tablet
and wearable markets. Skyworks is a global company with
engineering, marketing, operations, sales and support facilities
located throughout Asia,
Europe and North America and is a member of the S&P
500® and Nasdaq-100® market indices (Nasdaq: SWKS). For more
information, please visit Skyworks' website at
skyworksinc.com.
Note to Editors: Silicon Laboratories, Silicon Labs, the "S"
symbol, the Silicon Laboratories logo and the Silicon Labs logo are
trademarks of Silicon Laboratories Inc. Skyworks and the
Skyworks symbol are trademarks or registered trademarks of Skyworks
Solutions, Inc., or its subsidiaries in the United States and other
countries.
This press release contains forward-looking statements based on
Silicon Labs' current expectations. The words "believe,"
"estimate," "expect," "intend," "anticipate," "plan," "project,"
"will" and similar phrases as they relate to Silicon Labs are
intended to identify such forward-looking statements. These
forward-looking statements reflect the current views and
assumptions of Silicon Labs and are subject to various risks and
uncertainties that could cause actual results to differ materially
from expectations. Among the factors that could cause actual
results to differ materially from those in the forward-looking
statements are the following: the impact of COVID-19 on the U.S.
and global economy, including the restrictions on travel and
transportation and other actions taken by governmental authorities
and disruptions to the business of our customers or our global
supply chain that have occurred or may occur in the future, the
ongoing impact of COVID-19 on our employees and our ability to
provide services to our customers and respond to their needs; risks
that Silicon Labs may not be able to maintain its historical
growth; quarterly fluctuations in revenues and operating results;
difficulties developing new products that achieve market
acceptance; risks associated with international activities
(including trade barriers, particularly with respect to
China); intellectual property
litigation risks; risks associated with acquisitions and
divestitures; product liability risks; difficulties managing
Silicon Labs' distributors, manufacturers and subcontractors;
dependence on a limited number of products; absence of long-term
commitments from customers; inventory-related risks; difficulties
managing international activities; risks that Silicon Labs may not
be able to manage strains associated with its growth; credit risks
associated with its accounts receivable; dependence on key
personnel; stock price volatility; geographic concentration of
manufacturers, assemblers, test service providers and customers in
Asia that subjects Silicon Labs'
business and results of operations to risks of natural disasters,
epidemics or pandemics, war and political unrest; debt-related
risks; capital-raising risks; the competitive and cyclical nature
of the semiconductor industry; average selling prices of products
may decrease significantly and rapidly; information technology
risks; cyber-attacks against Silicon Labs' products and its
networks and other factors that are detailed in the SEC filings of
Silicon Laboratories Inc. Silicon Labs disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. References in this press release to Silicon Labs
shall mean Silicon Laboratories Inc.
![(PRNewsfoto/Silicon Labs) (PRNewsfoto/Silicon Labs)](https://mma.prnewswire.com/media/457128/silicon_labs_Logo.jpg)
View original content to download
multimedia:http://www.prnewswire.com/news-releases/silicon-labs-announces-agreement-to-divest-infrastructure-and-automotive-business-301275402.html
SOURCE Silicon Labs