Planned Acquisition Significantly Expands
and Diversifies Revenue and Product Mix, Accelerates Penetration of
the Global Connected Home Entertainment Market
Conference Call to be Webcast Today at 5:30 a.m. Pacific
Time
Entropic Communications, Inc. (Nasdaq:ENTR), a leading provider of
silicon and software solutions to enable connected home
entertainment, today announced it has filed an asset purchase
agreement as "stalking horse" bidder to purchase certain assets of
Trident Microsystems' (Nasdaq:TRID) set-top box (STB) system on a
chip (SoC) business in connection with Trident's Chapter 11
bankruptcy filing on January 4, 2012. The planned USD$55 million
acquisition would bring together two highly complementary
technologies, product lines, and teams.
"The acquisition of Trident Microsystems' set-top box business
provides an important strategic opportunity for Entropic by
enabling us to combine our best-in-class MoCA solutions, including
MoCA2, with Trident's system on a chip (SoC) business to deliver a
complete system solution to the world's premier cable, telco and
satellite service providers, while expanding our total addressable
market over the next several years," said Patrick Henry, president
and CEO, Entropic. "Additionally, this acquisition would provide us
with key talented resources, increased scale, valuable intellectual
property, broader customer relationships and an expanded worldwide
footprint to ensure sustained success in our core markets and
accelerated penetration in the global SoC markets."
"Trident's set-top box SoC business is highly complementary to
Entropic's leading MoCA solutions product line," said Bami Bastani,
president and CEO, Trident. "Our mutual culture of technical
innovation and execution excellence, along with our multi-year
history of product collaboration, should allow a seamless hand-off
for our OEM customers and service providers."
As part of the intended acquisition, Entropic would obtain
Trident's complete STB product portfolio, comprised of a
comprehensive suite of digital STB components and system solutions
for worldwide satellite, terrestrial, cable and IPTV networks. The
Company's STB product offering includes STB SoCs, DOCSIS® modems,
interface devices and media processors. In addition, Trident's STB
product line-up features a range of ARM Cortex-A9 based SoCs that
have been optimized for leading Web technologies such as Adobe®
Flash, HTML5 and OpenGLES2.0 gaming as well as cost optimized
standard definition and high definition Digital Terminal Adapter
(SD/HD-DTA) devices to meet the needs of cable/multiple system
operator (MSO) analog reclamation initiatives.
Entropic intends to invest in service and support for the
existing Trident STB customer base, as well as advance Trident's
STB product line by continuing to invest in its development --
leveraging mutual strengths of both companies' technologies to
provide customers with next generation, integrated Multimedia over
Coax (MoCA®) based chip-set solutions.
The assets to be acquired under the agreement include Trident's
specific STB products, patents and other intellectual property,
certain tangible assets and inventory. To complement its products,
Trident also offers complete reference designs that are bundled
with a range of operating systems, middleware, drivers and
development tools – all of which would fall under the Entropic
brand upon completion of the sale to Entropic.
Entropic would plan to hire approximately 385 Trident employees
located primarily in China, India, the United Kingdom, Taiwan,
Korea and the United States. Entropic would also acquire facilities
in Austin, Texas, Belfast, Northern Ireland and Hyderabad, India
and would use portions of Trident's facilities in China, Taiwan and
Korea under a facilities use agreement while Entropic assesses its
facilities requirements.
The purchase price is USD$55 million in cash, plus assumption of
specified liabilities upon the closing of the transaction, subject
to adjustment for closing working capital balances and other
matters, as set forth in the asset purchase agreement. Trident has
selected Entropic as its stalking horse bidder with customary
protections, subject to Bankruptcy Court approval. The asset
purchase agreement to be entered between Trident and Entropic has
been filed with the United States Bankruptcy Court for the District
of Delaware along with Trident's motion seeking the establishment
of bidding procedures for an auction that allows other qualified
bidders to submit higher or otherwise better offers, as required
under Section 363 of the U.S. Bankruptcy Code. Entropic expects
that hearings before those courts to approve bidding procedures,
break-up fees and expense reimbursement will be held within the
next two weeks, followed by an auction, with hearings for approval
of the ultimate sale to be held thereafter. Consummation of the
transaction, which is expected to occur in the first quarter of
2012, remains subject to higher or otherwise better offers,
approval by the United States Bankruptcy Court and customary
closing conditions.
For More Information
Entropic management will be holding a conference call today,
January 4, 2012, at 5:30 a.m. Pacific Time/8:30 a.m. Eastern Time
to discuss the pending transaction. You may access the conference
call via any of the following:
Teleconference: |
(631) 813-4729 |
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Conference ID: |
40337515 |
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Web Broadcast: |
http://ir.entropic.com/events.cfm |
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Replay: |
(404) 537-3406 |
About Entropic Communications
Entropic Communications, Inc. (Nasdaq:ENTR) is a leading fabless
semiconductor company that is engineering the future of connected
home networking and entertainment by providing next-generation
silicon and software technologies to the world's leading cable,
telco and satellite service providers, OEMs and consumer
electronics manufacturers. As a co-founder of MoCA (Multimedia over
Coax Alliance), Entropic pioneered and continues to evolve the way
high-definition television-quality video and other multimedia and
digital content such as movies, music, games and photos are brought
into and delivered throughout the home. For more information, visit
Entropic at www.entropic.com.
The Entropic Communications logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4255
Forward-Looking Statements
Statements in this press release that are not strictly
historical in nature constitute "forward-looking statements." Such
statements include, but are not limited to, statements regarding
the anticipated benefits of the proposed acquisition and
anticipated timing of bankruptcy related events impacting the sale
process. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause Entropic's
actual results to be materially different from historical results
or from any results expressed or implied by such forward-looking
statements. These factors include, but are not limited to, the risk
that the acquisition will not be completed and that Entropic's
expenses related to the acquisition will not be reimbursed or
recouped; risks associated with Trident's bankruptcy; the risk that
Trident's set-top box business will deteriorate before the
acquisition is closed as a result of the bankruptcy or for other
reasons; the risk that Entropic will be required to invest
substantially more in the business, or in integrating the business
with Entropic's existing operations, than presently anticipated;
risks associated with integrating a newly acquired business which
is larger, more geographically dispersed and substantially more
complex than Entropic's existing business; Entropic's reliance on
key employees of the acquired business and the risk that Entropic
will not be able to hire or retain such employees; risks that
Entropic's systems, infrastructure and personnel may not be
adequate to effect a rapid and orderly integration of the acquired
business; risk that anticipated benefits of the acquisition will
not be realized; risks associated with the dependence of the
acquired business on a limited number of suppliers and customers;
risks associated with entering into a new business segment; risks
associated with international operations; technology risks;
competition; the risk that the market for HD video and multimedia
content delivery solutions may not develop as Entropic anticipates;
and other factors discussed in the "Risk Factors" section of
Entropic's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2011. All forward-looking statements are qualified in
their entirety by this cautionary statement. Entropic is providing
this information as of the date of this release and does not
undertake any obligation to update any forward-looking statements
contained in this release as a result of new information, future
events or otherwise.
CONTACT: Investor Contact:
Debra Hart
Director, Investor Relations
+1 858.768.3852
debra.hart@entropic.com
Media Contact:
Robbin Lynn
Marketing Communications Manager
+1 760.579.2261
robbin.lynn@entropic.com
Chris Fallon
Ruder Finn for Entropic Communications
+1 917.974.1667
fallonc@ruderfinn.com