Toumaz acquires fabless DAB radio chip firm

Ultralow power wireless technologies pioneer Toumaz Ltd has agreed to acquire fabless DAB radio chip firm Frontier Silicon Holdings Ltd. The deal is estimated at about $50 million.

Toumaz, a developer of low-power wireless technology it applies to medical applications, said it intends to raise about $46 million before expenses to put toward the purchase of Frontier through a placing of 285.6 million shares.

Frontier, founded in 2001, is a supplier of chips for digital audio and audio subsystems. Frontier has around 130 staff, 70 percent engineers, with R&D centers in Cambridge, Ireland and Hong Kong.

Both companies are strongly linked to graphics processor IP licensor Imagination Technologies Group plc. Imagination has acted as a strategic partner and supporter of both Toumaz and Frontier and both companies supply chips to Imagination's Pure consumer electronics equipment subsidiary.

The deal has been constructed so that Toumaz will pay an initial about $42.5 million in cash with a deferred consideration up to about $8.2 million, which will be paid, dependent on the performance of the enlarged company.

Toumaz emphasized that the deal is a good fit as Toumaz' medical aspirations fit with the consumer profile of Frontier. Frontier has in excess of $34 million in annual revenue and the acquisition would give Toumaz access to a customer list that includes Bang & Olufsen, Bose, JVC, Panasonic, Philips, Pure, LG, Roberts Radio and Sony.

As a result of the acquisition, Anthony Sethill, founder and former CEO of Frontier and now CEO of Toumaz, will get to resume leading the team of people he left at the end of 2011.

- Peter Clarke
??EE Times