US software company Synaptics Inc. (Nasdaq: SYNA) today announced that it has signed a definitive agreement to acquire Israeli provider of voice and wireless chipset solutions for converged communications DSP Group Inc. (Nasdaq: DSPG). The acquisition, already unanimously approved by the boards of directors of both companies, is for $22 per share, an 18% premium on DSP Group's share price at closing on Friday, giving the company an overall valuation of $540 million.
The merger is anticipated to generate annual run rate synergies of $30 million for the new entity to be realized within 12 months of closing and is immediately accretive to Synaptics' non-GAAP earnings.The transaction is expected to be financed through a combination of cash on hand and a fully committed, incremental debt financing arrangement with a projected close by the end of calendar year 2021, subject to DSP Group shareholder approval and customary closing conditions.
DSP Group, which has traded on Nasdaq since 1994, provides chips across multiple markets in the Internet of Audio Things (IoAT) with significant growth opportunities in low power SmartVoice, unified communications & collaboration, and wireless IoT devices. Most of these solutions are quite relevant to Synaptics' existing customer base, furthering the strategy of cross-selling portfolio devices.
DSP Group CEO Ofer Elyakim said, "We are excited to join forces with Synaptics, a recognized leader in products for IoT. This combination provides a great result for our shareholders who have supported us through this journey, delivering meaningful and certain value. Our complementary portfolios together with the combination of our world-class engineering teams creates an exciting opportunity for DSP Group's core technology to extend further into our existing customers' product portfolio."
Synaptics president and CEO Michael Hurlston said, "We continue to invest in technologies that tilt our product mix toward IoT applications. DSP Group's expertise in SmartVoice and ULE wireless solutions, coupled with Synaptics' leadership position in far-field speech recognition and IoT directed Wi-Fi/BT combos enables us to deliver increasingly differentiated solutions to our combined customer base, while positioning us to lead the transition to AI enabled devices at the edge of the network."
Published by Globes, Israel business news - en.globes.co.il - on August 30, 2021
Copyright of Globes Publisher Itonut (1983) Ltd. 2021