US set-top box circuitry provider MaxLinear has acquired local fabless semiconductor developer Entropic for US$287m in an all-stock deal.
Entropic shareholders will receive US$1.20 per share in cash, and 0.2200 shares of MaxLinear common stock for each…
US set-top box circuitry provider MaxLinear has acquired local fabless semiconductor developer Entropic for US$287m in an all-stock deal.
Entropic shareholders will receive US$1.20 per share in cash, and 0.2200 shares of MaxLinear common stock for each Entropic common share outstanding.
MaxLinear and Entropic shareholders will own roughly 65% and 35% of the merged company, respectively.
The deal will boost MaxLinear’s competitiveness in the satellite pay-TV market, where it has recently turned to for growth. It will also add scale to the group’s existing analog/mixed-signal business, enhancing solutions for broadband and access partners, OEM customers, and service providers.
They expect to close the transaction in Q2 2015, subject to approval by the shareholders of both companies and regulatory clearances.
MaxLinear CEO Kishore Seendripu said: “We believe the scale and strategic benefits of a broader technology portfolio will enable us to accelerate our expansion into new markets more effectively.
“The financial benefits of the transaction should be immediately visible, as we expect non-GAAP earnings accretion in the first full quarter post-close.”
Entropic hired Barclays last year to evaluate strategic alternatives after suffering declining sales and losses, stemming from customers being slower than expected to take up its connected home technology. The group has been developing a series of Sat-IP products for DTH providers, enabling satellite signals to be converted to internet protocol and distributed over an IP network.
MaxLinear hired Stifel as its financial adviser. Wilson Sonsini Goodrich & Rosati, P.C. is acting as its counsel, while Cooley LLP is acting as counsel for Entropic.
Entropic reported US$42.6m in Q4 net revenues, compared with US$43.2m for the previous quarter. It posted a Q4 net loss (GAAP) of US$25.4m, compared with US$27.6m for Q3.
