AUSTIN, Texas and SAN JOSE, Calif., March 12, 2020-- Silicon Labs (NASDAQ: SLAB) announced that it has entered into a definitive asset purchase agreement with Redpine Signals to acquire the company's Wi-Fi and Bluetooth business, development center in Hyderabad, India, and extensive patent portfolio for $308 million in cash.
"The acquisition of Redpine Signals' ultra-low-power Wi-Fi and Bluetooth products and extensive intellectual property portfolio will expand our leadership in IoT wireless technology," said Tyson Tuttle, CEO of Silicon Labs. "The addition of these products into our worldwide sales and distribution network will drive further momentum in the smart home, industrial IoT and commercial markets for customers who want to get to market quickly with Wi-Fi enabled connected devices."
Wi-Fi 6 (802.11ax) is an important evolution of the Wi-Fi standard to meet the low power, performance, security and interoperability requirements needed in environments with hundreds or thousands of connected IoT devices. The integration of the Redpine Signals technology will accelerate Silicon Labs' roadmap for Wi-Fi 6 silicon, software and solutions. The acquisition also includes Bluetooth Classic IP (including Extended Data Rate) for audio applications including wearables, hearables, voice assistants and smart speakers.
The Redpine Signals acquisition includes an at-scale design center with approximately 200 employees in Hyderabad, India. The addition of Redpine's multidisciplinary and high-performing team will help Silicon Labs scale R&D faster and more efficiently in one of the most talent-rich locations in India.
"My team is excited to join Silicon Labs to help build a smarter, more connected world," said Venkat Mattela, founder and CEO of Redpine Signals. "Backed by two decades of advanced research in OFDM and MIMO systems, Redpine has created highly-differentiated, low-power multiprotocol SoCs. Going forward, low-power Wi-Fi 6 is a key wireless technology for connectivity in IoT devices."
Silicon Labs expects the transaction to add approximately $20 million in incremental revenue on an annualized basis for FY2020, to enhance its IoT revenue growth rate at comparable gross margin, and to be accretive to earnings per share on a non-GAAP basis in 2H 2021. The transaction will add approximately $15 million of non-GAAP operating expenses on an annualized basis.
The boards of directors of both companies and the stockholders of Redpine Signals have approved the transaction, which is expected to close in the second quarter of 2020 subject to customary closing conditions. J.P. Morgan Securities LLC served as exclusive financial advisor to Redpine Signals.
In lieu of a conference call, Silicon Labs will address questions regarding its acquisition of Redpine Signals' connectivity business at its March 12 Analyst Day, from 9 am to 1 pm CT. The event and accompanying presentation will be webcast live from the Investor Relations section of the company website at silabs.com/investor. The replay will be available for three months.
Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and solutions for a smarter, more connected world. Our award-winning technologies are shaping the future of the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. Our world-class engineering team creates products focused on performance, energy savings, connectivity and simplicity. silabs.com
Redpine Signals, Inc., is a global semiconductor and system solutions company founded in 2001 and headquartered in San Jose, California. It is focused on innovative development of ultra-low power and high-performance wireless and MCU products for next-generation IoT, wearable, home automation, medical, industrial and automotive applications.