Adesto Technologies (NASDAQ:IOTS), a leading provider of innovative
application-specific semiconductors for the IoT era, announced it
has acquired Dublin-based S3 Semiconductors, a global supplier of
mixed-signal and RF application specific integrated circuits
(ASICs) and an extensive library of design IP. The transaction is
valued at approximately $35 million, with an additional earn-out
provision based on certain milestones to the end of calendar year
2019.
Highlights of expected benefits of the transaction
include:
- Expands Adesto’s portfolio of products and technologies with
analog, mixed-signal, and RF solutions and IP
- Accelerates revenue and customer growth in communications and
industrial IoT with immediate cross-selling opportunities and
nominal customer overlap
- Increases dollar content potential for IoT edge nodes
- S3 Semiconductors is a highly-valued design partner of Arm
Holdings
- Adds high-value embedded systems expertise and mixed-signal
engineering team
- Immediately accretive to gross margin and adjusted EBITDA
“Building on our leadership position in IoT memories, today we
take a meaningful step in becoming a supplier of a broad range of
innovative semiconductor products and solutions for the IoT
markets,” said Narbeh Derhacobian, CEO of Adesto. “S3
Semiconductors has a proven track record of designing and
delivering differentiated ASIC products, and an extensive IP
portfolio developed by a talented team of design engineers over
many years. Through this acquisition, we are significantly
expanding our customer base and SAM with a broader product
portfolio and comprehensive systems expertise to deliver a complete
solution to our customers.”
Dermot Barry, vice president and general manager of S3
Semiconductors, commented, “Over the years, S3 Semiconductors has
built a first-class team that is focused on creating complex,
high-quality custom products. Joining forces with Adesto gives us
access to a broader sales channel with a diversified group of
top-tier customers who will benefit from our ability to deliver
highly optimized ASICs with unrivaled cost economies. Moreover, the
combined company is well-positioned to gain increasing traction in
IoT to drive toward the next phase of innovation and growth.”
S3 Semiconductors will become a business unit of Adesto and will
continue to operate under its current operating model across
existing global sites, including its four design centers in Dublin,
Cork, Prague and Lisbon.
Adesto financed the transaction with existing cash and a new
credit facility in the amount of $35 million. Concurrent with the
close of the new credit facility, Adesto terminated its former
credit facility with Western Alliance Bank, which included paying
off an outstanding term loan with a principal amount owed of $12
million.
ROTH Capital is serving as financial advisor and placement agent
to Adesto, and Menalto Advisors is serving as financial advisor to
S3 Group.
Conference Call and Slide Presentation
InformationAdesto will host a conference call today
Wednesday, May 9, 2018 at 2:00 p.m. Pacific Time (5:00pm Eastern
Time) in conjunction with the Company’s first quarter 2018 earnings
conference call. The call will be broadcast live over the Internet
and as an archived webcast with a slide presentation that can be
accessed by all interested parties in the Investor section of
Adesto’s website at http://www.adestotech.com. Investors and
analysts may also join the live call by dialing 1-844-419-1786 and
providing confirmation code 6975696. International callers may join
the teleconference by dialing +1-216-562-0473 using the same
confirmation code.
A telephone replay of the conference call will be available
approximately two hours after the conference call until Wednesday,
May 16, 2018 at midnight Pacific Time. The replay dial-in number is
1-855-859-2056 and the passcode is 6975696. International callers
should dial +1-404-537-3406 and use the same passcode.
About Adesto TechnologiesAdesto Technologies
(NASDAQ:IOTS) is a leading provider of innovative
application-specific semiconductors for the IoT era. The company’s
technology is used by more than 2,000 customers worldwide who are
creating differentiated solutions across industrial, consumer,
medical and communications markets. With its growing portfolio of
high-value technologies, Adesto is helping its customers usher in
the era of the Internet of Things. See: www.adestotech.com.
Follow Adesto on Twitter.
About S3 SemiconductorsS3 Semiconductors
designs advanced mixed-signal chips and manage every aspect of
supplying production devices to its customers using some of the
world’s most advanced semiconductor production facilities. With
more than 20 years’ experience designing advanced analog and
digital circuitry for hundreds of customers in every major region,
S3 Semiconductors delivers a new breed of design-centric
semiconductor supplier capable of optimizing its designs for every
customer, yet achieving cost economies not thought possible with
custom chips designs until now. S3 Semiconductors has its
headquarters in Dublin, Ireland, with offices in Cork, the US,
Portugal, the Czech Republic, along with representatives worldwide.
Visit www.s3semi.com.
Forward looking StatementsComments in this
press release contain forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements involve risks and
uncertainties that could cause our actual results to differ
materially, including, but not limited to the quotes in this
release regarding the acquisition of S3 Semiconductors and the
expected benefits to Adesto, S3 Semiconductors and their respective
customers and investors from completing the acquisition are
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
These statements involve risks and uncertainties that could cause
our actual results to differ materially, including that the
businesses of the Company and S3 Semiconductors may not be combined
successfully, or such combination may take longer, be more
difficult, time-consuming or costly to accomplish than expected;
the risk that sales of S3 Semiconductors’ products will not be as
high as anticipated; the expected growth opportunities, increase in
dollar content potential for IoT nodes, sales channel improvements
or cost savings from the acquisition may not be fully realized or
may take longer to realize than expected; customer losses and
business disruption following the acquisition, including adverse
effects on relationships with former employees of S3
Semiconductors, may be greater than expected; and the risk that the
Company may incur unanticipated or unknown losses or liabilities in
connection with the acquisition. Additional factors, that could
cause actual results to differ materially from those expressed in
the forward-looking statements include our ability to predict the
timing of design wins entering production and the potential future
revenue associated with our design wins; market adoption of our
CBRAM-based products; our limited operating history; our rate of
growth; our ability to predict customer demand for our existing and
future products and to secure adequate manufacturing capacity;
consumer demand conditions affecting our end markets; our ability
to manage our growth; our ability to hire, retain and motivate
employees; the effects of competition, including price competition;
technological, regulatory and legal developments; and developments
in the economy and financial markets.
For a detailed discussion of these and other risk factors,
please refer to the Company’s filings with the Securities and
Exchange Commission, including the Quarterly Report on Form 10-K
for the period ended December 31, 2017, filed with the SEC on March
13, 2018, which are available on our investor relations Web site
(ir.adestotech.com) and on the SEC’s Web site (www.sec.gov).
All information provided in this release and in the attachments
is as of May 9, 2018, and stockholders of Adesto are cautioned not
to place undue reliance on our forward-looking statements, which
speak only as of the date such statements are made. Adesto does not
undertake any obligation to publicly update any forward-looking
statements to reflect events, circumstances or new information
after this May 9, 2018 press release, or to reflect the occurrence
of unanticipated events.
Adesto Technologies and the Adesto logo are trademarks of Adesto
Technologies in the United States and other regions. All other
trademarks are property of their respective owners.
Adesto Technologies Media Contact:Jen
Bernier-Santarini+1 650-336-4222press@adestotech.com
Adesto Technologies Investor Relations:Leanne
K. Sievers Shelton Group949-224-3874sheltonir@sheltongroup.com
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