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NXP, DSP Group merge cordless, VoIP terminals biz

Posted: 17 May 2007 ?? ?Print Version ?Bookmark and Share

Keywords:VoIP terminals? cordless terminals? home electronics?

NXP Semiconductors and DSP Group Inc. (DSPG) announced they will combine their cordless and VoIP terminals businesses, a transaction that can reach a total value of $345 million and will provide NXP with approximately 12 percent shareholding in DSPG.

DSPG will pay $270 million, consisting of $200 million in cash and $70 million in the issuance of its common stock for NXP's cordless and VoIP terminals business, currently part of the company's mobile and personal business unit. DSPG has also agreed to a contingent cash payment of up to $75 million payable based on future revenue performance. The transaction is expected to be positive to earnings per share of DSPG in 2007 and beyond, excluding transaction expenses, intangible amortization and other one time charges in connection with the acquisition. The transaction is expected to close Q3 2007, subject to closing conditions, including regulatory approvals.

NXP's cordless and VoIP terminals business generated approximately $220 million revenue in 2006 and comprises some 200 staff based at locations around the world, most of whom will transfer to the DSP Group.

"Combining our operations creates a powerful force that will put DSP Group firmly into a leadership position in terms of scale and technology for the benefit of all major customers in our industry," said Eli Ayalon chairman and CEO, DSPG. "We will have a much stronger European presence to help us accelerate the penetration of VoIP and DECT technologies in the region and will have a more powerful research and development engine that will benefit from the advanced NXP process technologies."

"This transaction will create a strong combination with the scale to grow its business," said Frans van Houten, NXP president and CEO. "It allows NXP to focus our growth on the six chosen market segments: cellular phones, personal entertainment, home electronics, automotive, identification and multi market semiconductors. Additionally, with the proceeds we will be able to strengthen these segments, for example with future acquisitions."

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