Cirrus Logic Agrees to Acquire Wolfson Microelectronics

[btarunr]

Cirrus Logic, Inc. (NASDAQ : CRUS) and Wolfson Microelectronics plc (LSE : WLF or WLF.L) today announced the terms of a recommended transaction under which Cirrus Logic would acquire Wolfson at a price of £2.35 per share in cash, implying an enterprise value of £278 million, or approximately $467 million. The transaction, if approved, is expected to strengthen Cirrus Logic's ability to expand its customer base with highly differentiated, end-to-end audio solutions for portable audio applications. The transaction will be financed by a combination of existing cash on Cirrus Logic's balance sheet and $225 million in debt funding.

"Wolfson has a rich history of audio innovation, a broad catalog of audio products and a first class customer list," said Jason Rhode, Cirrus Logic President and Chief Executive Officer. "This acquisition strengthens Cirrus Logic's core business as a leader in audio signal processing components, enhances our ability to differentiate our products with software, and adds new product categories such as MEMS microphones to our portfolio."

"The Board of Wolfson believes that this is an attractive offer for Wolfson shareholders," said Michael Ruettger, Chairman of the Board of Wolfson Microelectronics. "We believe this reflects the hard work that Mike Hickey and his team have put into building Wolfson as a leader in the supply of high performance Audio Hubs and MEMS microphones to the consumer electronics market. Together with Cirrus Logic, we believe this will create a powerful platform for future growth, above and beyond our standalone potential."

The acquisition is expected to be completed in the second half of 2014. Cirrus Logic expects the acquisition to be accretive to non-GAAP earnings per share in the first full quarter after the transaction closes (excluding the impact of one-time integration and acquisition related costs). The transaction is subject to regulatory approvals and the approval of Wolfson shareholders.

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[btarunr]

We usually don't post such deep semiconductor industry releases, but Cirrus Logic and Wolfson are relevant to the audiophile community. They're both high-end DAC chip makers.

 

[BumbleBee]

sounds like a smart acquisition.

last D/A converter I owned used one Wolfson 8740 per channel.

 

[TheLostSwede]

Actually, this is a pretty big deal considering how many companies use both Cirrus Logic and Wolfson DAC's in their products.

 

[Gadgety]

Thanks for posting. Both Cirrus and Wolfson are significant names in the audio scene. Cirrus has been doing really well in the past year, with 90% growth in net sales (809 MUSD) mainly driven by portable audio products, and the market shift towards stand alone audio processors even in mobile phones. The same can be said for Wolfson growth wise, but with turnover about a fifth of Cirrus', Wolfson was running red numbers. The customer portfolios are extremely complementary. Essentially merging #2 and #3 in the portable audio market they will provide giant Qualcomm with a serious competitor, while being better placed with the current trend of stand alone audio processors in mobile phones. Hopefully Cirrus will know how to handle the acquisition and not destroy value.