Allegro MicroSystems Completes Acquisition of Crocus Technology to Accelerate Innovation in TMR Sensing Technology
October 31 2023 - 5:35PM
Allegro MicroSystems, Inc. (“Allegro”) (Nasdaq: ALGM), a global
leader in power and sensing semiconductor technology for motion
control and energy efficient systems, today announced that it has
completed the acquisition of Crocus Technology, a leader in
advanced TMR sensor technology, for $420 million in cash, subject
to customary working capital adjustments. This acquisition
accelerates Allegro’s TMR roadmap and strengthens its leading
position in the magnetic sensing market.
“On behalf of the entire company, I am thrilled
to welcome the Crocus team to Allegro. We look forward to working
together to bring Crocus’ TMR technology and our combined value
proposition to our customers,” said Vineet Nargolwala, President
and CEO of Allegro. “This highly strategic acquisition demonstrates
Allegro’s commitment to its leadership position in magnetic
sensing. Further, we expect this combination to solidify Allegro as
a leading TMR semiconductor company by leveraging a unique
opportunity to drive broader adoption of TMR technology across
high-growth strategic focus areas, including e-Mobility, Clean
Energy and Automation.”
The acquisition was funded by a combination of
cash on hand and a new seven-year $250 million senior secured term
loan.
About Allegro MicroSystems
Allegro MicroSystems is a leading global
designer, developer, fabless manufacturer and marketer of sensor
integrated circuits (“ICs”) and application-specific analog power
ICs enabling emerging technologies in the automotive and industrial
markets. Allegro’s diverse product portfolio provides efficient and
reliable solutions for the electrification of vehicles, automotive
ADAS safety features, automation for Industry 4.0 and power saving
technologies for data centers and green energy applications.
Forward Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. We intend such forward-looking statements to be
covered by the safe harbor provisions for forward-looking
statements contained in Section 27A of the Securities Act of 1933,
as amended and Section 21E of the Securities Exchange Act of 1934,
as amended. All statements other than statements of historical
facts contained in this press release should be considered
forward-looking statements, including, without limitation,
statements regarding the expected benefits of a business
combination with Crocus Technology. These statements involve known
and unknown risks, uncertainties and other important factors that
may cause our actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. In some cases, you can identify forward-looking
statements by terms such as “aim,” “may,” “will,” “should,”
“expect,” “exploring,” “plan,” “anticipate,” “could,” “intend,”
“target,” “project,” “would,” “contemplate,” “believe,” “estimate,”
“mission,” “predict,” “potential,” “seek,” or “continue,” or the
negative thereof and similar words and expressions, although not
all forward-looking statements contain these words. No
forward-looking statement is a guarantee of future results,
performance, or achievements, and one should avoid placing undue
reliance on such statements.
Forward-looking statements are based on
management’s current expectations, beliefs and assumptions and on
information currently available to us. Such beliefs and assumptions
may or may not prove to be correct. Additionally, such
forward-looking statements are subject to a number of known and
unknown risks, uncertainties and assumptions, and actual results
may differ materially from those expressed or implied in the
forward-looking statements due to various factors, including, but
not limited to, those identified in Part II, Item 7. “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations,” and Part I, Item 1A. “Risk Factors” in our Annual
Report on Form 10-K for the year ended March 31, 2023. These risks
and uncertainties include, but are not limited to: downturns or
volatility in general economic conditions; our ability to compete
effectively, expand our market share and increase our net sales and
profitability; our reliance on a limited number of third-party
semiconductor wafer fabrication facilities and suppliers of other
materials; our failure to adjust purchase commitments and inventory
management based on changing market conditions or customer demand;
shifts in our product mix or customer mix, which could negatively
impact our gross margin; the risk that the expected benefits of
acquisitions may not be realized or that integration of acquired
businesses may not continue as rapidly as we anticipate the
cyclical nature of the analog semiconductor industry; any downturn
or disruption in the automotive market; our ability to compensate
for decreases in average selling prices of our products and
increases in input costs; our ability to manage any sustained yield
problems or other delays at our third-party wafer fabrication
facilities or in the final assembly and test of our products; our
ability to accurately predict our quarterly net sales and operating
results; our ability to adjust our supply chain volume to account
for changing market conditions and customer demand; our dependence
on manufacturing operations in the Philippines; our reliance on
distributors to generate sales; the effects of COVID-19 on our
supply chain and customer demand; our ability to develop new
product features or new products in a timely and cost-effective
manner; our ability to manage growth; any slowdown in the growth of
our end markets; the loss of one or more significant customers; our
ability to meet customers’ quality requirements; uncertainties
related to the design win process and our ability to recover design
and development expenses and to generate timely or sufficient net
sales or margins; changes in government trade policies, including
the imposition of export restrictions and tariffs; our exposures to
warranty claims, product liability claims and product recalls; our
dependence on international customers and operations; the
availability of rebates, tax credits and other financial incentives
on end-user demands for certain products; risks, liabilities, costs
and obligations related to governmental regulation and other legal
obligations, including export control, privacy, data protection,
information security, consumer protection, environmental and
occupational health and safety, anti-corruption and anti-bribery,
and trade controls; the volatility of currency exchange rates; our
ability to raise capital to support our growth strategy; our
indebtedness may limit our flexibility to operate our business; our
ability to effectively manage our growth and retain key and highly
skilled personnel; our ability to protect our proprietary
technology and inventions through patents or trade secrets; our
ability to commercialize our products without infringing
third-party intellectual property rights; disruptions or breaches
of our information technology systems or those of our third-party
service providers; our principal stockholders have substantial
control over us; the inapplicability of the “corporate opportunity”
doctrine to any director or stockholder who is not employed by us;
anti-takeover provisions in our organizational documents and under
the General Corporation Law of the State of Delaware; our inability
to design, implement or maintain effective internal control over
financial reporting; changes in tax rates or the adoption of new
tax legislation; the negative impacts of sustained inflation on our
business; disruptions in the banking and financial sector that
limit our or our partners’ ability to access capital and
borrowings; the physical, transition and litigation risks presented
by climate change; and other events beyond our control. Moreover,
we operate in an evolving environment. New risk factors and
uncertainties may emerge from time to time, and it is not possible
for management to predict all risk factors and uncertainties. Our
risk factors may be updated or supplemented from time to time in
our other filings with the SEC, which are accessible on the SEC’s
website at www.sec.gov and the Investors Relations page of our
website at investors.allegromicro.com.
You should read this press release with the
understanding that our actual future results may be materially
different from what we expect. We qualify all of our
forward-looking statements by these cautionary statements. All
forward-looking statements speak only as of the date of this press
release and, except as required by applicable law, we do not plan
to publicly update or revise any forward-looking statements
contained herein, whether as a result of any new information,
future events, changed circumstances or otherwise.
Contact:Jalene HooverVP of
Investor Relations & Corporate Communications+1 (512)
751-6526jhoover@allegromicro.com
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