HAUPPAUGE, N.Y. — (BUSINESS WIRE) — June 14, 2010 — SMSC (NASDAQ: SMSC), a leading semiconductor company creating valued connectivity ecosystems, today announced that it has acquired Wireless Audio IP B.V. (“STS”), a fabless designer of plug-and-play wireless solutions for consumer audio streaming applications, including home theater, headphones, LED TVs, PCs, gaming and automotive entertainment. Customers include many of the industry’s leading consumer and PC brands. STS’s robust, low latency digital audio baseband processor and integrated module solutions are highly complementary to SMSC’s Kleer® wireless audio products. Together, the STS and Kleer teams intend to collaborate on developing best-in-class baseband processor and audio networking solutions that allow end users to enjoy state-of-the-art entertainment in the home, in the car or on the go.
“We are excited about the expansion of SMSC’s wireless audio product portfolio with the acquisition of STS,” said Christine King, President & Chief Executive Officer of SMSC. “The growth potential in the wireless audio market is significant as this technology is no longer just a unique application for audio enthusiasts. With this technology, we are enabling a new experience with high quality, untethered digital stereo audio transmission when listening to music, watching movies on a PC or TV and for playing videogames. We believe we are well positioned to build our market position now that we have assembled the technology and talent of two of the industry’s leading designers of wireless audio.”
Founded in 2003, STS has developed patented custom audio processing technology that is universal and highly scalable from previous generations, creating easy and efficient design environments for customers. Its wireless platform has shipped in millions of units of customer product deployed in a wide array of consumer applications. STS is headquartered in Amsterdam, The Netherlands, with offices in Singapore and China.
SMSC expects Kleer and STS to contribute approximately $15 million in revenue in fiscal 2011 and the acquisitions are expected to be neutral to slightly accretive during SMSC’s current fiscal year 2011. Under terms of the share purchase agreement, SMSC paid $22 million in cash and additional cash payments of up to $3 million may occur upon achievement of certain performance goals. The acquisition closed on June 14, 2010.
Forward Looking Statements
Except for historical information contained herein, the matters discussed in this announcement are forward-looking statements about expected future events and financial and operating results that involve risks and uncertainties. These uncertainties may cause our actual future results to be materially different from those discussed in forward-looking statements. Our risks and uncertainties include the timely development and market acceptance of new products; the impact of competitive products and pricing; our ability to procure capacity from our suppliers and the timely performance of their obligations, commodity prices, interest rates and foreign exchange, potential investment losses as a result of liquidity conditions, the effects of changing economic and political conditions in the market domestically and internationally and on our customers; our relationships with and dependence on customers and growth rates in the personal computer, consumer electronics and embedded and automotive markets and within our sales channel; changes in customer order patterns, including order cancellations or reduced bookings; the effects of tariff, import and currency regulation; potential or actual litigation; and excess or obsolete inventory and variations in inventory valuation, among others. In addition, SMSC competes in the semiconductor industry, which has historically been characterized by intense competition, rapid technological change, cyclical market patterns, price erosion and periods of mismatched supply and demand.
Our forward looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations and may not reflect the potential impact of any future acquisitions, mergers or divestitures. All forward-looking statements speak only as of the date hereof and are based upon the information available to SMSC at this time. Such statements are subject to change, and the Company does not undertake to update such statements, except to the extent required under applicable law and regulation. These and other risks and uncertainties, including potential liability resulting from pending or future litigation, are detailed from time to time in the Company's reports filed with the SEC. Investors are advised to read the Company's Annual Report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission, particularly those sections entitled “Other Factors That May Affect Future Operating Results” or “Risk Factors” for a more complete discussion of these and other risks and uncertainties.
SMSC is a leading developer of Smart Mixed-Signal Connectivity™
solutions. SMSC employs a unique systems level approach that
incorporates a broad set of technologies and intellectual property to
deliver differentiating products to its customers. The company is
focused on delivering connectivity solutions that enable the
proliferation of data in personal computers, automobiles, portable
consumer devices and other applications. SMSC’s feature-rich products
drive a number of industry standards and include USB, MOST®
automotive networking, Kleer® wireless audio, embedded system
control and analog solutions, including thermal management and
RightTouch™ capacitive sensing. SMSC is headquartered in New York and
has offices and research facilities in North America, Asia, Europe and
India. Additional information is available at