To strengthens its position in the consumer electronics space, Geneva-based semiconductor giant STMicroelectronics announced today that it will acquire Santa Clara, Calif.-based image and video processing systems enabler Genesis Microchip Inc. for approximately $336 million in cash.
Thanks to this acquisition, ST said it expects to expand its leadership in the $1.5 billion digital TV market, one of the fastest growing segments in consumer electronics semiconductors, while Genesis is set to enhance ST’ technological capabilities for the transition to fully digital solutions in this segment by strengthening its product and IP portfolio.
Under terms of the agreement, ST will commence a cash tender offer to purchase all of the outstanding shares of Genesis for $8.65 per share, net to the holder in cash.
When the tender offer is complete, ST will complete a second-step merger in which any remaining common shares of Genesis will be converted into the right to receive the same per share price paid in the tender offer. Overall, the offer price represents a premium of 60 percent to Genesis’ closing share price on December 10 and 26 percent to the average closing share price during the last sixty trading days prior to this announcement.
During the 12 months ended September 30, Genesis reported revenues of $191 million with cash and cash equivalents along with short-term investments totaling approximately $183 million.
ST said it will finance the acquisition using existing cash on its balance sheet.
The acquisition has been approved by Genesis’ board of directors, which unanimously recommended that holders of Genesis’ common stock accept the tender offer and approve the second-step merger. ST expects to begin the tender offer no later than December 18.
The deals are expected to be completed in Q1 2008.
Philippe Lambinet, corporate VP and general manager of ST’s home entertainment and displays group said in a statement, “The combined company will have the products, technology, IP and expertise to offer best-in-class integrated DTV processing solutions that our customers are increasingly demanding. We also believe that the Genesis DisplayPort technology brings expanded opportunities to the PC and home entertainment markets.”
Elias Antoun, Genesis’ president and CEO added, “Joining forces with STMicroelectronics will put us in the best position to ensure that our products and technologies remain at the forefront of our industry. Our innovative technology, when combined with STMicroelectronics' resources, silicon design expertise and manufacturing capabilities can accelerate the delivery of the next generation of solutions for our digital television, flat-panel display and DisplayPort customer base.”
When the deal closes, Genesis will become part of ST’s home entertainment and displays group. Antoun will join ST and will lead the company’s television and display initiatives, reporting to Lambinet.
In other ST news, the company reported Monday that it has manufactured the first functional devices to be built using CMOS 45 nm radio frequency (RF) technology, which it says will be essential for next-generation wireless local area network applications.
Manufactured on 300-mm silicon wafers at Crolles, France, ST said the prototype SoC devices integrate a functional chain from the initial detection of the RF signal to the output of digital data ready for subsequent processing with these prototypes delivering state-of-the-art performance and density of only 0.45 square mm for the low noise amplifier, mixer, analog- digital converter and filtering working at 1.1V.
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