Buying Bluetooth

RF Micro Devices has signed a definitive agreement to acquire Silicon Wave, a privately held San Diego, CA-based outfit that supplies ICs for Wireless Personal Area Networks.

RF Micro Devices has signed a definitive agreement to acquire Silicon Wave, a privately held San Diego, CA-based outfit that supplies ICs for Wireless Personal Area Networks (WPANs).

Silicon Wave’s Bluetooth product portfolio includes single-chip CMOS radio processors (including the radio modem and digital baseband functions), as well as stand-alone CMOS radio modem solutions. The CMOS Bluetooth radio processors have an architecture that does not require external flash memory nor external RF components.

Silicon Wave’s Bluetooth products are currently in production and in use in cellular handsets, PC peripherals and consumer electronics devices.

RFMD will pay approximately $10.8 million in cash in exchange for all outstanding shares of Silicon Wave capital stock not owned by RFMD. Additionally, if certain revenue performance goals for the years ending March 31, 2005 and 2006 are met, RFMD will pay additional amounts in cash to shareholders of Silicon Wave.

Excluding one-time acquisition-related charges, the impact of the transaction to RFMD’s earnings per share is expected to be dilutive by approximately $0.02 per share in the quarter ending June 30, 2004. RF Micro Devices forecasts that the transaction should become neutral to accretive from an earnings standpoint in approximately 12 to 15 months.

The merger transaction is expected to close within 30 days. The boards of directors of both companies have approved the merger, which awaits approval by Silicon Wave’s shareholders and other customary closing conditions.

Silicon Wave will be incorporated into RFMD’s wireless connectivity business unit, which focuses on developing and producing components and system-on-chip (SoC) solutions for Bluetooth, global positioning systems (GPS) and wireless local area networks (WLANs).