Inphi to Acquire eSilicon, a Leading Provider of 2.5D Packaging, SerDes and Custom Silicon
November 11 2019 - 8:00AM
Inphi Corporation (NYSE: IPHI), a leading provider of high-speed
data movement interconnects, today announced that it has signed a
definitive agreement to acquire eSilicon for $216 million in both
cash and the assumption of debt.
“The Inphi team is excited to enhance our value proposition to
our cloud and telecom customers with the addition of the eSilicon
team and IP,” said Ford Tamer, president and CEO of Inphi.
“eSilicon adds to Inphi world-class 2.5D packaging, SerDes, custom
silicon and operations teams. Just as we successfully leveraged our
Cortina and Clariphy acquisitions, eSilicon will advance our shared
commitments in driving successful customer engagement,
industry-leading innovation, and best of class execution.”
Acquisition Highlights
Inphi has familiarity with the eSilicon team and opportunity
through past interactions, investment, and an ongoing board
observer seat. Once complete, Inphi expects the acquisition
would:
- Combine Inphi’s DSP, TiA, Driver and SiPho disciplines with
eSilicon’s 2.5D packaging and custom silicon design capabilities
and accelerate the roadmap for electro-optics, 5nm advanced CMOS
process node, and custom DSP solutions
- Augment Inphi’s existing SerDes team and resources
- Extend Inphi’s addressable market in Cloud data center
networking and Telecom 5G infrastructure with top tier OEM
customers
- Expand Inphi’s presence into new, strategic geographies for
talent acquisition with engineering design centers in Italy,
Romania, Vietnam, and Spain and operations in Malaysia
- Add between $80 to $120 million to 2020 revenue, be accretive
to 2020 EPS and both the 2021 revenue and EPS growth rates
- Increase Inphi’s operational scale with suppliers, lowering
costs and resulting in financial leverage
- Result in Inphi paying about 2.2X 2020 revenue in a combination
of cash and debt assumption
The acquisition is expected to close in the fourth quarter of
2019, subject to US and Vietnamese regulatory approval and
customary closing conditions. Concurrent with the signing of the
definitive agreement, eSilicon has sold its Embedded Memory IP
(SRAM, TCAM, and multi-port memory compiler) and Interface IP (HBM
and HBI) assets to Synopsys Incorporated.
Conference CallInphi will host a conference
call to discuss the transaction today at 8:30 AM Eastern / 5:30 AM
Pacific. Interested parties may join the call by dialing (765)
507-2591, participant passcode 4485776. Please dial-in ten minutes
prior to the scheduled conference call time. A live and archived
webcast of the call will be available on Inphi’s website at
https://inphi.com/investors/ for up to 30 days after the call.
Further details of the transaction and arrangements are set out
in Inphi’s Current Report on Form 8-K filed with the Securities and
Exchange Commission on November 11, 2019.
Forward-Looking StatementsThis press release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Such statements
contain words such as "believe," "will," and "expect," or the
negative thereof or comparable terminology, and include (without
limitation) statements regarding the acquisition of eSilicon and
expectations regarding the timing and impact thereof, including
projected plans for Inphi after the acquisition, an expanded
product portfolio, new product development and introduction, impact
on customers and market position, additions to our team and
financial impacts of the acquisition. Forward-looking statements
involve certain risks and uncertainties, and actual results may
differ materially from those discussed in any such statement. These
risks include, but are not limited to: the ability of the parties
to timely satisfy the conditions for closing the acquisition,
including obtaining necessary regulatory approvals, the ability to
integrate the two companies, including retention of key personnel
of eSilicon and maintaining sales to existing eSilicon customers,
the impact on our financial performance, the ability to extend
product offerings into new areas or products, the ability to
commercialize technology, unexpected occurrences that deter the
full documentation and "bring to market" plan for products, trends
and fluctuations in the industry, changes in demand and purchasing
volume of customers, unpredictability of suppliers, the ability to
attract and retain qualified personnel, the ability to move product
sales to production levels, the ability to compete for client
design-in opportunities, the ability to cross-sell to new clients
and to diversify, and the success of product sales in new markets
or of recently produced product offerings, including bundled
product solutions. Additional factors that could cause actual
results to differ are discussed under the heading "Risk Factors"
and in other sections of the Inphi filings with the SEC, and in its
other current and periodic reports filed or furnished from time to
time with the SEC. All forward-looking statements in this press
release are made as of the date hereof, based on information
available to Inphi as of the date hereof, and Inphi assumes no
obligation to update any forward-looking statement.
About InphiInphi Corporation is a leader in
high-speed data movement. We move big data fast, throughout the
globe, between data centers, and inside data centers. Inphi's
expertise in signal integrity results in reliable data delivery, at
high speeds, over a variety of distances. As data volumes ramp
exponentially due to video streaming, social media, cloud-based
services, and wireless infrastructure, the need for speed has never
been greater. That's where we come in. Customers rely on Inphi's
solutions to develop and build out the Service Provider and Cloud
infrastructures, and data centers of tomorrow. To learn more about
Inphi, visit www.inphi.com.
About eSiliconeSilicon Corp. provides complex
FinFET ASICs, market-specific IP platforms and advanced 2.5D
packaging solutions. Our ASIC-proven, differentiating IP includes
highly configurable 7nm 56G/112G SerDes plus networking-optimized
16/14/7nm FinFET IP platforms featuring HBM2 PHY, TCAM, specialized
memory compilers and I/O libraries. Our neuASIC™ platform provides
AI-specific IP and a modular design methodology to create
adaptable, highly efficient AI ASICs. eSilicon serves the
high-bandwidth networking, high-performance computing, AI and 5G
infrastructure markets. www.esilicon.com
Inphi, the Inphi logo and Think fast are registered trademarks
of Inphi Corporation. All other trademarks used herein are the
property of their respective owners.
Inphi Corporation Investor Contact:Vernon Essi,
Jr.investors@inphi.com
Inphi Corporation Corporate Contact:Kim
Marklekmarkle@inphi.com
eSilicon Corporation Corporate Contact:Sally
Slemonssslemons@esilicon.com
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