UPDATE: Synaptics Announces Purchase of Renesas Sp Drivers for $475M
Synaptics Inc. (NASDAQ: SYNA), a leading developer of human interface solutions, today announced that it has signed a definitive agreement to acquire all of the outstanding equity of Renesas SP Drivers, Inc., the industry leader in small and medium-sized display driver ICs (DDICs) for smartphones and tablets. With the acquisition, Synaptics expects to increase its addressable market opportunity by 1.5X and to accelerate its product roadmap for touch-and-display driver integration (TDDI). The combination enables platform-level solutions for select segments of the mobile market, while also extending its leadership position in Touch and DDIC product families.
The addition of Renesas SP Drivers positions Synaptics at the forefront of a tremendous growth opportunity with a complete portfolio of products to address a full spectrum of display market needs. The acquisition underscores Synaptics' commitment to developing high-performance and cost effective solutions for its customers, backed by the unparalleled technical leadership, real-time local support, and systems level engineering expertise that its valued customers need.
"The acquisition of Renesas SP Drivers unites complementary and best-in-class technologies and brings on board a very experienced, highly skilled engineering team, strengthening Synaptics' position as the number one touchscreen controller supplier to the mobile display market, with unmatched platform level technologies," said Rick Bergman, President and CEO, Synaptics. "Upon closing the acquisition, we will have the scale to accelerate our technology roadmap and expand our broad portfolio of human interface product families including display integration solutions."
"We are very excited about joining Synaptics. The combination of Synaptics and Renesas SP Drivers forms an even stronger market leader with a highly complementary combination of products and technologies," said Ikuo Kudo, President and CEO, Renesas SP Drivers. "The well-matched technologies and enhanced scale will drive further innovations in mobile display."
Synaptics will pay a purchase price of approximately JPY48.5B ($475 million) for 100% of Renesas SP Drivers, based on JPY52.5B ($515 million) enterprise value. The purchase price is based on cash and other adjustments and is subject to customary adjustments for net working capital, net debt, and third party expenses. The US dollar consideration is based on a yen conversion rate of 102.
For the year ended March 2014, Renesas SP Drivers' revenue and cash flow were approximately $650 million and $100 million, respectively. The combined business of Synaptics and Renesas SP Drivers is expected to create significant revenue and investment scale to drive future growth and operating leverage. The acquisition will be immediately accretive to Synaptics' non-GAAP EPS, excluding transaction related expenses. The acquisition is expected to close in the fourth calendar quarter of 2014, subject to customary closing conditions and regulatory reviews, as necessary. Synaptics intends to fund the transaction with cash and committed debt financing of $300 million. Additional details can be found in Synaptics' Current Report on Form 8-K, filed today.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.