Deal doubles size of DSP Group - NXP becomes 12% stockholder
EINDHOVEN, Netherlands and SANTA CLARA, Calif., May 14
/PRNewswire-FirstCall/ -- NXP Semiconductors, the newly independent
semiconductor company founded by Philips, and DSP Group, Inc. (Nasdaq:
DSPG) today announced that they will combine their Cordless & VoIP
terminals businesses within DSP Group to create a market leader in the
cordless and VoIP residential telephony market. The transaction can reach a
total value of $345 million and will provide NXP with a shareholding of
approximately 12% in DSP Group.
DSP Group will pay $270 million, consisting of $200 million in cash and
$70 million in the issuance of DSP Group's common stock on the basis of the
average closing price per share for DSP Group's common stock on NASDAQ
Global Market during the twenty business days ending on the fifth business
day prior to the closing of the transaction, for NXP's Cordless & VoIP
terminals business, currently part of the company's Mobile and Personal
Business Unit. DSP Group 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 in the third quarter of 2007, subject to closing
conditions, including regulatory approvals.
NXP's Cordless & 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. 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. NXP will also become a strategic investor and will get a seat
on the Board of Directors of DSP Group, and will not transfer its shares of
DSP Group common stock for at least two years following the closing," said
Eli Ayalon Chairman and CEO, DSP Group.
"This transaction will create a strong combination with the scale to
grow its business. 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. I am confident that this deal will benefit our
global customers in the cordless market, as they will be served well by
this new strong market leader, "said Frans van Houten, NXP President and
CEO.
Commenting on the deal, Egon Durban, Managing Director of Silver Lake,
on behalf of the group of private equity investors in NXP, observed, "We
continue to be excited by our investment in NXP. This transaction
illustrates the tremendous strategic benefit of industry consolidation to
create market leaders, and will generate substantial benefits for both
parties and their customers."
NXP Cordless & IP Terminals business line supplies RF chipsets,
basebands, software and system solutions for: DECT, DECT 6.0, WDCT 2.4,
5.8, Analog 900, 2.4, 5.8, VoIP/MTA, USB Softphones, and VoIP Gateways. In
2006, the group sold approx. 300 million products in digital cordless.
DSP Group was advised by UBS Investment Bank and Morrison Foerster. NXP
was advised by Merrill Lynch and De Brauw Blackstone Westbroek.
About DSP Group
DSP Group, Inc. is a fabless semiconductor company, offering advanced
chip-set solutions for a variety of applications. DSP Group is a worldwide
leader in the short-range wireless communication market, enabling home
networking convergence for voice, video & data. By combining its in-house
technologies of Digital Signal Processors (DSPs), portfolio of wireless
communication protocols, including DECT, Bluetooth and Wi-Fi, most advanced
Radio Frequency CMOS and SiGe, as well as VoIP ICs, DSP Group is a
worldwide leader and a one-stop-shop for a wide range of applications.
These applications include ISM band digital 900MHz, 2.4GHz and 5.8GHz
telephony, European DECT (1.9GHz) telephony, Bluetooth systems for voice,
data and video communication and deployment in residential, SOHO, SME,
enterprise and automotive applications. DSP Group ICs provide solutions for
MP3 players, VoIP Phones, Gateways, and Integrated Access Devices and are
widely used in Digital Voice Recorders. More information about DSP Group is
available at http://www.dspg.com.
About NXP
NXP is a top 10 semiconductor company founded by Philips more than 50
years ago. Headquartered in Europe, the company has 37,000 employees
working in more than 20 countries and posted sales of EUR 5 billion in
2006. NXP creates semiconductors, system solutions and software that
deliver better sensory experiences in mobile phones, personal media
players, TVs, set-top boxes, identification applications, cars and a wide
range of other electronic devices. News from NXP is located at http://www.nxp.com.
Forward-looking statements of DSP Group
This release contains certain forward-looking statements with respect
to the financial condition, results of operations and business of DSP Group
and certain of the plans and objectives of DSP Group with respect to the
proposed transaction, including statements regarding the timetable for
completion of the transaction and the benefits of the transaction,
including the accretive effect on EPS, increase of revenues and expansion
of the company. Forward-looking statements are subject to certain risks,
trends and uncertainties that could cause actual results to differ
materially from those projected, expressed or implied by such
forward-looking statements, including, but not limited to: the ability to
obtain regulatory approvals of the transaction on the proposed terms and
schedule; the risk that the businesses will not be integrated successfully;
the risk that the revenue potentials, cost savings and any other synergies
from the transaction may not be fully realized or may take longer to
realize than expected; disruption relating to the transaction that makes it
more difficult for DSP Group to maintain relationships with customers,
employees or suppliers and other risks and uncertainties associated with
the contemplated transaction. Actual results could differ materially from
those discussed in or implied by forward-looking statements for various
reasons, including those discussed in "Risk Factors" in DSP Group's Form
10-K. You should not place undue reliance on any forward-looking
statements. Except as expressly required by the federal securities laws,
DSP Group undertakes no obligation to publish, update or revise any
forward-looking statements, whether as a result of new information, future
events, changed circumstances or any other reason.
Forward-looking statements NXP
This release may contain certain forward-looking statements with
respect to the financial condition, results of operations and business of
NXP and certain of the plans and objectives of NXP with respect to these
items. By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on circumstances that
will occur in the future and there are many factors that could cause actual
results and developments to differ materially from those expressed or
implied by these forward-looking statements
DSP Group - Special Conference Call Details
DSP Group has scheduled a conference call for 8:30 a.m. EDT today to
discuss this special announcement and we invites you to listen to the call.
The conference call dial-in number is 1-800-688-0836 for US and
1-617-614-4072 for international calls, the pass code is DSP Group. The
call also may be accessed via webcast through the Investor Relations
section (investor message board) of DSP Group's Web site at http://www.dspg.com or
link to: http://ir.dspg.com./phoenix.zhtml?c=101665&p=irol-calendar.
If you cannot join the call, please listen to the replay, which will be
available for approximately two weeks after the call on DSP Group's Web
site or by calling the following numbers:
--US Dial-In # 1-888-286-8010 (passcode: 60724020)
--International Dial-In # 1-617-801-6888 (passcode: 60724020)
CONTACT:
NXP DSP Group
Lieke de Jong-Tops Ofer Elyakim
lieke.de.jong-tops@nxp.com ofere@dsp.co.il
+31 (0)40 2725202 +1 (408) 986-4421
SOURCE DSP Group
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Related links:
http://www.dspg.com
http://ir.dspg.com./phoenix.zhtml?c=101665&p=irol-calendar
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20020715/SFM118LOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Lieke de Jong-Tops for NXP,
lieke.de.jong-tops@nxp.com, +31(0)40-2725202; or Ofer Elyakim for
DSP Group, ofere@dsp.co.il, +1-408-986-4421
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