LONDON Simtek Corporation has raised $11 million in a private placement of shares, the bulk of which is being used to complete the previously announced acquisition of a nonvolatile memory product line from Zentrum Mikroelektronik Dresden AG (ZMD).
The deal with ZMD, valued at $8 million in cash and $2 million in stock, announced last month gives Simtek sole ownership of its patents and other IP used by the German group on silicon-oxide-nitride-oxide-silicon (SONOS) based nvSRAM architectures previously licensed to ZMD.
Simtek (Colorado Springs, Colo.) also said Tuesday (Jan. 3) the remaining $3 million raised would be used as working capital to finance future growth.
"This financing and the ZMD transaction represent a significant change in the financial health and foundation of the company”, commented Harold Blomquist, Simtek president and CEO.
“The additional business represented by the ZMD acquisition and Simtek's ability to finance growth as a result of the financing transaction should enable us to establish and sustain an aggressive position in the market. Earlier in my tenure I indicated that Simtek is preparing to apply for re-listing on a securities exchange. With this series of events, we are progressing nicely toward that goal," Blomquist added.
The company said it is now considering a reverse stock split in order to bring the number of issued and outstanding shares into the range of 10 million to 20 million and potentially re-incorporating Simtek as a Delaware corporation.
As part of the final agreement between the companies, ZMD will be prohibited, for five years, from competing with certain of Simtek's products and from hiring employees of Simtek in certain situations.