Sunnyvale, California - June 7, 2004 - Zoran Corporation, a leading provider of digital solutions on-a-chip for applications in the growing digital entertainment and digital imaging markets (Nasdaq NM: ZRAN), today announced it has signed a definitive stock purchase agreement to acquire Emblaze Semiconductor, a subsidiary of Emblaze Ltd. (LSE: BLZ). Emblaze Semiconductor, based in Ra'anana, Israel, provides semiconductor-based solutions for high volume mobile multimedia appliances in the telecommunication, consumer and security markets.
Under the terms of the agreement, Zoran's wholly-owned Israeli subsidiary, Zoran Microelectronics Ltd., will acquire all of the outstanding common shares of Emblaze Semiconductor for $54.2 million in cash. In addition, Zoran and Emblaze Ltd. entered into support, development and licensing agreements to provide customer support for the mobile phones and systems developed by Emblaze Mobile. The transaction is subject to applicable regulatory approvals and other customary closing conditions and is expected to be completed in the third quarter of 2004.
Zoran expects the transaction to be accretive to the company's earnings before amortization and goodwill in the second half of 2005. Zoran does not anticipate that the transaction will have any impact on its current earnings forecast for the remainder of the 2004.
"With this acquisition, Zoran will gain high performance, low-power application processors, technology and products for the fast growing multimedia mobile phone market," said Dr. Levy Gerzberg, president and CEO of Zoran. "When Emblaze Semiconductor's excellent technology and first-class team are combined with Zoran's image processing technology, integration expertise and seasoned development knowhow, Zoran will be able to deliver reliable, cost-effective system solutions for mobile phone makers. The next generation of multimedia mobile phones will offer audio, still or video image capture, playback, gaming, TV, email and internet download capabilities and more. This acquisition will provide an excellent additional synergistic growth opportunity for Zoran. We are proud to welcome the Emblaze Semiconductor team into the Zoran family."
"We welcome our new partnership with Zoran and look forward to our joint contributions towards growing our industry and our businesses," said Eli Reifman, chief executive officer of Emblaze Ltd. "Emblaze Semiconductor has achieved significant design wins with leading handset manufacturers such as Samsung, DBTel, Bird and Telson. However, we believe that Zoran is the right company to further develop the technology and a good new home for the Emblaze Semiconductor employees. Combining our complimentary technologies with a market leader such as Zoran will enable us to deliver new solutions to the growing consumer electronics industry."
Industry analysts estimate that over 500 million mobile phone units were shipped in 2003 and forecast an increase to around 850 million units in 2006. With the acquisition of Emblaze Semiconductor, Zoran will be well positioned to address the mid to high-end feature phone, smart phone, and PDA segments of the mobile phone market.
Zoran Corporation, based in Sunnyvale, California, is a leading provider of digital solutions-on-a-chip for applications in the growing digital entertainment and digital imaging markets. With two decades of expertise developing and delivering digital signal processing technologies, Zoran has pioneered high-performance digital audio, video, and imaging applications. Zoran's proficiency in integration delivers major benefits for OEM customers, including greater capabilities within each product generation, reduced system costs, and shorter time to market. Zoran-based DVD, digital camera, DTV, and imaging products have received recognition for excellence and are now in millions of homes and offices worldwide. With headquarters in the U.S. and operations in Canada, China, Europe, Israel, Japan, Korea, and Taiwan, Zoran may be contacted on the World Wide Web at www.zoran.com or at (408) 523-6500.
About Emblaze Semiconductor
Emblaze Semiconductor is a fabless IC company, providing semiconductor-based solutions for high volume mobile multimedia appliances in the telecommunication, consumer and security markets. The company's products have already been implemented in a wide range of custom-designed industry leading handsets and wireless video cameras. Emblaze Semiconductor empowers its customers to turn multimedia capabilities into high volume mobile/wireless information devices such as cellular phones, PDAs, digital cameras, toys, etc. By combining its many years of expertise in digital audio and video with an in-depth understanding of the real requirements of mobile embedded systems, the company offers true solutions that bring real value to their customers. For more information about Emblaze Semiconductor, please visit: www.emblazesemiconductor.com
Forward Looking Statements
This press release includes a number of forward-looking statements that reflect Zoran's views with respect to future events and financial performance. These forward-looking statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those currently projected. These uncertainties include the risk that the acquisition of Emblaze Semiconductor may not be consummated and potential problems related to the assimilation and integration of the operations, technologies and products of Emblaze Semiconductor with those of Zoran, as well as other risks and uncertainties associated with the rapidly evolving markets for the Company's products, intensive competition in those markets, the Company's reliance on independent foundries and contractors for its wafer supplies and product assembly and testing and its ability to ramp up manufacturing capacity to meet changing customer requirements; the effects of changes in revenue and product mix on the Company's gross margins; the Company's historic dependence on sales to a limited number of large customers and fluctuations in customer and product mix among those customers; the dependence on key Company personnel; the reliance on international sales and operations, particularly the Company's operations in Israel; and the effects of general business and changing economic conditions on the markets that the Company serves. Further information regarding these and other risks and uncertainties can be found in the Company's most recently filed annual report on Form 10-K and other filings that have been made with the SEC.