May 14, 2007 – The DSP Group will pay $270 million in cash and stock for NXP Semiconductors’ cordless and voice-over-IP business, a transaction that could swell to $345 million depending on future performance benchmarks, the companies announced.
The operation, part of NXP’s mobile and personal business unit, generated about $220 million in revenue in 2006, and NXP claims it will be “positive to earnings” this year, excluding some expenses and charges. Most of the unit’s 200 staff worldwide are expected to move over to the DSP Group.
The deal gives DSP Group benefits of scale and technology, with a stronger European presence and better R&D capabilities for selling VOIP and digital enhanced cordless telecommunications technologies, according to Eli Ayalon, chairman and CEO of DSP Group.
For NXP (which gains a seat on DSP’s board as a 12% stakeholder), the transaction is another step in the path of focusing on six chosen market segments (cell phones, personal entertainment, home electronics, automotive, identification, and multimarket semiconductors), noted Frans van Houten, NXP president and CEO, adding that proceeds from this sale could be used for M&A opportunities in those areas.