Digital signal processing company DSP Group (Nasdaq: ) announced last night that it was buying Irish company Parthus Technologies plc (Nasdaq: PRTH) (LSE: PRH) and DSP Group, Inc. for $390 million. For the purposes of the deal, DSPG is setting up a subsidiary that will merge with Parthus. The value of the new unit is estimated at $660 million.
Parthus shareholders will receive $60 million cash, and shares in the new subsidiary to a value of $330 million. The companies said that the merger was unanimously approved by both boards of directors, and that it created a combined company which they believed would have clear leadership in the market for digital signal processing cores and platform-level IP, the core technologies for all digital communication and multimedia devices. The DSPG subsidiary is called Ceva, and includes the digital signal processing IP licensing business of . The new combined company will be called ParthusCeva, Inc.
Under the terms of the Merger, immediately following the transaction, shareholders of and Parthus will own approximately 50.1% and 49.9% of ParthusCeva, respectively.
The boards of Parthus and expect the merger to be completed by the end of the third quarter of 2002, subject to, inter alia, receipt of a favourable tax ruling from the US Internal Revenue Service of the tax-free spin-off of the Ceva Business by
Eli Ayalon, chairman and CEOof who will also be chairman of ParthusCeva said, "The merger of our two companies will create what we believe to be the leading independent provider of DSP-based IP solutions with strong customer penetration of many of the world's largest semiconductor companies and OEMs. ParthusCeva will be in the unique position of being able to offer an integrated IP solution -- including communication, application and multimedia IP built around the company's DSP core technology. This integrated solution will favourably position ParthusCeva to exploit the industry trend towards the licensing of open-standard IP architectures for the digital economy."
Kevin Fielding, president of Parthus, who will be CEO of ParthusCeva, said, "This is a compelling combination that brings together two leading companies with complementary technologies, roadmaps, customer bases and target markets. DSP technology is fundamental to our customers as they target their products at high growth markets such as wireless communications, mobile computing, automotive, consumer entertainment and computer networking. By combining industry leading DSP cores with Parthus' portfolio of platform-level IP, we believe ParthusCeva will be uniquely positioned to deliver to our customers integrated solutions based on our open-standard processor architecture."
ParthusCeva will be headquartered in San Jose, California. It will have over 400 employees, with approximately 330 involved in research and development.
Published by Israel's Business Arena on April 5, 2002