BANGALORE, India Moschip Semiconductor, a fabless semiconductor company based in the southern Indian city of Hyderabad, will acquire design house Netmos Technology Inc. (Santa Clara, Calif.) in a stock swap deal.
While details of the stock swap were not released, Moschip chairman K. Ramachandra Reddy said Netmos would become a wholly owned subsidiary of Moschip. "It's a great idea to buy Netmos," Reddy said. "It gives Netmos shareholders a good deal."
Reddy already holds a 29 percent stake in Netmos, a fabless product design operation. He is one of the U.S. company's founders.
Moschip is India's first and only VLSI design company listed on India's stock exchanges. It is also the only Indian company that sells products in its own brand name. Its products are manufactured at Taiwanese fabs.
"Being listed allows us to offer employee stock options as a good tool to attract employees from the multinational companies," Reddy said.
The company's stock price is running about 200 percent higher than its initial list price.
Moschip designs and develops ICs for the data communications and consumer electronics markets. Its latest product is an enhanced-capability parallel port for the computer peripherals market.
Another senior Moschip executive, C. Dayakar Reddy, said the Netmos acquisition "will provide Moschip with additional product portfolio and expand our existing customer base. This acquisition will enable us to enhance our market presence and increase our revenue stream."
In 2002, the combined companies estimate, their revenues will reach $7 million.
Netmos Technology has developed a series of PCI interface products employing standard cells that can be produced at multiple foundries.
Moschip said the accounting firm PricewaterhouseCoopers has been retained as a consultant for the acquisition and will determine the value of the deal.