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NXP to Acquire Conexant's Set-top Box Operations
April 30, 2008
Source: NXP
In its latest transformational
move, NXP Semiconductors, the independent semiconductor company
founded by Philips, today announced it will acquire the Broadband
Media Processing (BMP) business of Conexant Systems, Inc.,
(NASDAQ: CNXT). With this transaction, NXP's existing set-top
box and digital TV operations will be combined with Conexant's
BMP business. The combined operations will create a top three
player in digital video systems with the scale to establish
a strong leadership position. The deal represents NXP's fourth
acquisition since independence and is the first for its Home
Business Unit.
Conexant's BMP business, which provides industry-leading solutions
for satellite, cable and IPTV applications, accounted for
US $205 million in revenue in 2007. Under the terms of the
deal, NXP will pay Conexant US $110 million in cash up front,
and additional consideration of up to US $35 million based
on achievement of certain revenue milestones over the period
from closing through 2009.
Conexant's strengths in broadcast operator set-top box (STB)
solutions are complementary to NXP's terrestrial IP and retail
STB and Digital TV products. Combined, they will offer the
widest semiconductor portfolio for STB and digital TV applications
in the industry, creating a unique technology source for developing
digital video applications: innovative IC solutions for receiving
more digital content in terrestrial, cable, satellite and
IPTV broadcast environments with best in class picture and
sound quality, anytime, anywhere in the home.
"NXP continues on the path to reshape the industry by
building scale and leadership positions in its portfolio.
By acquiring Conexant's BMP activities, our digital TV and
STB business will be strengthened in the operator segment
of the market and we position ourselves to compete effectively
on a global basis." said Frans van Houten, Chief Executive
Officer, NXP Semiconductors.
"We anticipate many R&D synergies from the combination
such as the development of IP that can be reused across NXP's
STB and digital television systems portfolio. I am pleased
to bring on board a strong team of Conexant engineers who
have established a track record of developing industry-leading
and award-winning solutions. Also Conexant's BMP management
team will bring to NXP their excellent market knowledge and
close customer relationships," said Christos Lagomichos,
EVP and General Manager of NXP's Home Business Unit.
"Over the years, the Conexant team has successfully developed
complex solutions for a variety of set-top box applications,"
said Scott Mercer, Conexant's chief executive officer. "NXP
has a long history in consumer electronics, and they possess
the scale, skill-sets, and resources required to maintain
and expand the positions we established. I am convinced that
the combined team will attain an even higher level of success
as they continue to deliver innovative, cost-effective set-top
box solutions to customers worldwide."
When the transaction closes, approximately 700 Conexant employees
at locations in the United States, India, Northern Ireland,
Israel and China will join NXP's Home Business Unit. The transaction
is subject to customary closing conditions and regulatory
approvals, and is expected to close in the next 60 days.
Conexant's BMP business being acquired by NXP offers a comprehensive
suite of digital STB components and system solutions for worldwide
satellite, cable and IP entertainment broadcasting networks.
The company's product offering includes silicon tuners, demodulators,
MPEG audio and video decoders, and DOCSIS® modems. Complete
reference designs that help manufacturers reduce cost and
speed time-to-market are also available, bundled with a range
of operating systems, middleware, drivers and development
tools.
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