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SiRF, CSR to join forces

Posted: 12 Feb 2009 ?? ?Print Version ?Bookmark and Share

Keywords:SiRF CSR? merge agreement? connectivity platforms location?

SiRF Technology Holdings Inc. and CSR plc have a definitive agreement to merge in a stock-for-stock transaction to create a company that addresses connectivity and location platforms. The boards of directors of both companies have unanimously approved the transaction, which is expected to close in Q2 09.

SiRF and CSR will create a company that will capitalize on the large and growing multifunction consumer electronics market opportunity for connectivity and location technologies. Based on CSR's and SiRF's results for fiscal year 2008, on a pro forma basis, the combined companies would have had sales of approximately $927 million. The combination will create the single largest pure play provider of integrated connectivity and location platforms and will be one of the top 10 fabless semiconductor companies in the world. Customers of the combined company include four of the top five handset manufacturers, the top five personal navigation device makers, the top two auto-telematics suppliers, and other leading auto and consumer electronics providers. CSR and SiRF will have design and customer support centers located around the world.

Under the terms of the agreement, SiRF stockholders will receive 0.741 of a CSR share for each share of SiRF common stock they own. Based on the closing stock price for CSR on Feb. 9, 2009, this consideration would be equivalent to $2.06 of CSR stock for each SiRF share, representing total consideration of $136 million. This represents a premium to SiRF stockholders of approximately 91 percent over SiRF's closing stock price on Feb. 9, 2009. Upon closing of the transaction, SiRF stockholders are expected to own approximately 27 percent, and CSR shareholders are expected to own approximately 73 percent of the combined company. The transaction is expected to be tax-free for SiRF stockholders.

Dado Banatao, executive chairman of the board and interim CEO of SiRF, said, "This transaction unites two market and technology leaders in their respective fields who together will be able to deliver a broad portfolio of innovative products that are critical to the rapid evolution of consumer electronics, mobile phones, mobile computers and automotive devices. Our market opportunity is being driven by growing consumer demand for greater functionality."

Commenting on the merger, Joep van Beurden, CEO of CSR, said, "Financially, strategically and commercially, this is a compelling transaction. We expect it to be significantly accretive to enhance the enlarged group's financial strength and cash position and to create new and wider revenue opportunities that neither party on its own could pursue as effectively."

Kanwar Chadha, SiRF's founder, board member and VP of marketing, said, "This merger unites two companies with a shared market vision and equally strong commitments to innovation, customers, shareholders and employees. CSR is the right partner to create additional growth opportunities for our company, and we believe that both our companies will benefit significantly by being part of a larger, dynamic and growing organization."

Goldman, Sachs & Co. and Simpson Thacher & Bartlett LLP acted as financial advisor and legal counsel for SiRF, respectively.

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