Picochip to be bought by Mindspeed

The purchase price is approximately $58.1million and there is a potential earnout payment of up to $25m payable in the first calendar quarter of 2013. According to both companies, the acquisition will create a 'clear market leader' in small cell base station solutions for next generation mobile broadband communications infrastructure. Together, the companies plan to offer the most comprehensive portfolio of base station semiconductors on the market, from residential to pico/metro applications. Mindspeed says its range of single and multi mode 3G/4G solutions will enable it to capitalise on the rapid acceleration of the small cell wireless base station market, while also addressing support for all 3G and 4G global air interface standards. Mindspeed's management estimates the total addressable market for the combined entity will grow to $3billion by 2016. Nigel Toon, chief executive officer and president of Picochip, pictured, said: "Mindspeed is the ideal acquirer for us. Together, we have valuable technology and customer synergies, given Picochip's carrier qualified 3G wireless technology leadership with over 70% market share in 3G/high speed packet access and Mindspeed's proven pathway as the LTE small cell pioneer with the Transcede product family. Our combined resources create one of the largest SoC development groups in the wireless infrastructure sector with complementary intellectual property scale and expertise to deliver the solutions that this fast moving market demands." "Our acquisition of Picochip establishes our position as a global leader in wireless infrastructure semiconductor solutions for next generation mobile broadband communications," added Raouf Halim, chief executive officer of Mindspeed. "It is a great strategic fit for several reasons. First, it positions Mindspeed as the clear leader in small cell base station technology with the industry's broadest small cell product offering, addressing a significantly expanded market opportunity of $3billion by 2016. Second, it enhances our competitive position as we join our respective 3G/4G technologies to offer single and multi mode solutions that we believe will provide us a time to market and product performance advantage relative to competitors. Third, it gives us the scale to lead the industry's move toward fixed/mobile broadband convergence; a trend which we believe will drive revenue and earnings growth for Mindspeed in the future." The transaction has been approved by Mindspeed's and Picochip's boards of directors and is subject to certain closing conditions. The transaction is expected to close in the first calendar quarter of 2012.