Synaptics buys US chipmaker DSP to expand in low-power smart devices
Synaptics has agreed to buy US-based chipmaker DSP Group, as part of efforts to expand its portfolio of components for low-power smart devices.
The company will pay $22 per DSP share in cash, a significant premium on DSP’s previous closing share price of just over $14. The offer values DSP at around $532 million for all its outstanding shares. Both companies’ boards have approved the deal.
According to a statement by the company, “The combination is anticipated to generate annual run rate synergies of $30 million for the new entity to be realized within 12 months of closing and is immediately accretive to Synaptics’ non-GAAP earnings.”
The transaction is expected to be financed through a combination of cash on hand and a fully committed, incremental debt financing arrangement with a projected close by the end of calendar year 2021, subject to DSP Group shareholder approval and customary closing conditions.
“We continue to invest in technologies that tilt our product mix toward IoT applications,” said Michael Hurlston, President and CEO of Synaptics.
“DSP Group’s expertise in SmartVoice and ULE wireless solutions, coupled with Synaptics’ leadership position in far-field speech recognition and IoT directed Wi-Fi/BT combos enables us to deliver increasingly differentiated solutions to our combined customer base, while positioning us to lead the transition to AI enabled devices at the edge of the network,” he noted.
“We are excited to join forces with Synaptics, a recognized leader in products for IoT. This combination provides a great result for our shareholders who have supported us through this journey, delivering meaningful and certain value,” said Ofer Elyakim, CEO of DSP Group.
“Our complementary portfolios together with the combination of our world-class engineering teams creates an exciting opportunity for DSP Group’s core technology to extend further into our existing customers’ product portfolio.”
Synaptics recently announced its Low Power Edge AI initiative, which opens a significant long-term opportunity with ABI research predicting approximately 2.5 billion TinyML units to be sold by 2030.
The addition of DSP Group’s SmartVoice products to Synaptics’ Katana smart vision platform creates a complete portfolio that can both serve existing customer needs and address the significant future market. In addition, the combination further strengthens Synaptics’ industry-leading wireless connectivity portfolio by adding DECT Ultra Low Energy (ULE), which enables a fully-featured intelligent home security solution.