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Synaptics to acquire Broadcom’s wireless IoT business
Posted on Wednesday, 08 July 2020 10:07
Synaptics has agreed to acquire certain assets and manufacturing rights associated with the wireless Internet of Things (IoT) business of Broadcom for around USD 250.00 million in an all-cash transaction.
Under the terms of the agreements, the buyer will pick up the seller’s existing Wi-Fi, Bluetooth and GPS/GNSS products and business in the IoT market, as well as future roadmap devices designed in advanced process nodes.
The deal strengthens and accelerates Synaptics’ position in the fast-growing consumer IoT market.
Completion is expected to occur in the first quarter of fiscal 2021, subject to the usual raft of customary closing conditions.
The transaction has been approved by the buyer’s board and will be funded using existing cash on hand.
Synaptics expects the transaction to add around USD 65.00 million in current annualised sales and provide significant revenue growth potential.
The deal is slated to be immediately accretive to Synaptics’ non-generally accepted accounting principals gross margins and earnings post-closing.
Michael Hurlston, chief executive of the buyer, said: “Expanding our offering in the high growth IoT market has been one of the major focus areas for Synaptics and the addition of best-in-class wireless connectivity technology to our portfolio significantly enhances our overall position.
“This acquisition complements Synaptics’ ability to sell into a broad range of devices such as IP [Internet protocol] cameras, smart displays, speakers, home automation, and gaming consoles – all of which require cutting-edge technologies including Wi-Fi 6 and 6E, Bluetooth 5.2 and GPS L5.”
In the six months ended 3rd May 2020, the purchaser posted revenue of USD 11.60 billion, up slightly from USD 11.31 billion in the corresponding period of 2019.
Adjusted earnings before interest, taxes, depreciation and amortisation increased to USD 6.47 billion in H1 2020 (H1 2019: USD 6.35 billion).
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