Expands Company's TAM and Addressable Silicon Content Per Handset
SHANGHAI, China, March 26, 2012 -- RDA Microelectronics ("RDA"), a fabless semiconductor company that designs, develops and markets Radio Frequency (RF) and mixed-signal semiconductors for cellular, connectivity and broadcast applications, today announced that it has acquired all of the baseband intellectual property of Coolsand Holding Co., Ltd., a privately held baseband company with business operations in China, and its subsidiaries ("Coolsand"). The consideration paid is $46 million, comprised of approximately $20 million in cash and 15 million RDA ordinary shares. The market value of the shares totals approximately $26 million as determined by the March 21, 2012 NASDAQ closing price of RDA's American Depositary Shares, each representing six ordinary shares.
The asset purchase provides significant strategic benefits to RDA's business, including:
- Expanding its product offerings to provide a comprehensive portfolio of integrated and standalone solutions for China handset manufacturers;
- Increasing silicon content per handset significantly;
- Extending its total addressable market (TAM) to include the worldwide baseband market;
- Diversifying and expanding its long-term revenue growth prospects; and
- Increasing its customer leverage and market share expansion opportunities.
Commenting on the purchase, Vincent Tai, chairman and CEO of RDA Microelectronics, stated, "We are now able to provide competitive baseband products alongside our comprehensive RF and mixed-signal offerings for the handset market. The addition of baseband products expands our total addressable market and silicon content per handset, simplifies the supply chain for our customers, and opens the way for further market share gains. Baseband is a large and growing market and potentially represents a significant revenue opportunity for RDA. We believe we are in a good position to be a strong competitor in this market and take share as a result of our strong product roadmap.
"Our collaboration with Coolsand over the past two years has yielded valuable knowledge in development, sales, marketing and support for baseband products. We have established a strong working relationship, which we believe will reduce integration risk and ultimately contribute to the reception and success of our products in the marketplace. Our co-developed baseband product is the most integrated 2G baseband available in its category with superior hardware integration and best-in-class architecture. Development work is currently in process for our next generation baseband products, including WCDMA and TD-SCDMA products. We expect to hire approximately 45 of Coolsand's employees, most of which are engineers. Coolsand baseband products have been gaining market share rapidly, and we plan to leverage our existing sales channels and strong customer base, which currently exceeds 800 companies, to continue the market share expansion.
"We expect that our strong R&D capabilities and efficient operating model, combined with our core competencies in product integration, circuit design know-how and cost control, will allow us to further extend our success to the baseband market. I believe this is the right time to enter this market based on RDA's market position and solid customer relationships. We have proven technological advantages that we believe will enable us to capitalize on the tremendous opportunities in the baseband market and drive our future growth."
RDA and Coolsand are both majority owned by entities affiliated with Warburg Pincus. This transaction has been approved by the independent directors who serve on RDA's audit committee.
About RDA Microelectronics
RDA Microelectronics is a fabless semiconductor company that designs, develops and markets radio-frequency and mixed-signal semiconductors. The Company's product portfolio currently includes power amplifiers, transceivers and front-end modules, Bluetooth system-on-chip, Wi-Fi, Bluetooth and FM combo chips, FM radio receivers, set-top box tuners, analog mobile television receivers, CMMB mobile television receivers, walkie-talkie transceivers and LNB satellite down converters. For additional information, please see the Company's website at http://www.rdamicro.com.