GigPeak, a semiconductor company grown through acquisition, has itself been acquired by Integrated Device Technology (IDT) for $250 million in cash. The transaction has been approved by the boards of both companies, with closing expected during the second quarter of 2017.
GigPeak, formerly GigOptix, was formed in 2007 when Avi Katz took over iTerra Communications, a developer of gallium arsenide driver chips. The company changed its name in 2016 following the acquisition of Magnum Semiconductor.
California-headquartered GigOptix also has operations in Auburn, California, as well as in Zurich, Switzerland, via its acquisition of Helix Semiconductors in 2008 and in Seoul, Korea, through its acquisition of TeraSquare in 2015 (see GigOptix acquires Terasquare for low-power, high-speed silicon).
IDT believes that GigPeak’s optical interconnect product and technology business will complement its own real-time interconnect products. GigPeak's optical interface products are used in the communications, cloud data centre, and military and aviation markets. Following the acquisition, IDT will provide ultra-high speed data connectivity products using electrical, RF, and optical technologies.
GigPeak’s revenue for the 2016 fiscal year was $58.7 million, an increase of 45 per cent over $40.4 million in 2015. Its net income was $2.2 million, up from $1.2 million in FY 2015. IDT reported third quarter fiscal 2017 revenue of $176.4 million.
“GigPeak is a recognised leader in high performance optical, RF, and video transport technology, and is a perfect fit for IDT. The products, technology, and culture of GigPeak all complement and represent an acceleration of our current strategy,” said Gregory Waters, IDT president and CEO. “We gain an exceptional group of talented people and valuable intellectual property with the GigPeak team, and welcome them into one of the most innovative companies in the semiconductor industry.”
Dr Avi Katz, founder, chairman and CEO of GigPeak, commented: “Upon the consummation of this acquisition, our leading product suite, which currently addresses the need for greater bandwidth across the network, will now have the advantage of leveraging the scale of resources and broad distribution channels of IDT.”
The acquisition is structured as an all-cash tender offer for all outstanding issued common stock of GigPeak followed by a merger in which remaining shares of GigPeak would be converted into the same dollar per share consideration as in the tender offer. The $3.08 per share consideration represents a premium of approximately 22 per cent to GigPeak's closing share price on 10 February 2017.