DUBLIN, Ireland -- Parthus Technologies plc here and U.S.-based DSP Group Inc. today announced an agreement to combine their intellectual property (IP) licensing businesses into a new company to serve digital signal processing-based applications in digital communications, wireless systems, and multimedia devices.
The new company will be called ParthusCeva Inc., and it will be headquartered in San Jose. The merger is expected to be completed in the third quarter of 2002. ParthusCeva will have over 400 employees, with approximately 330 involved in research and development, said DSG Group and Parthus.
The two companies had confirmed their merger talks last month, after DSP Group in Santa Clara, Calif., previously announced it was considering a spin-off of its IP licensing business (see March 15 story).
Under the agreement, Parthus and the IP business of DSP Group--which has been called Ceva--will merge as "equals," the two companies said. DSP Group shareholders will own 50.1% of the new company, with the remaining 49.9% being held by Parthus stock owners. As part of a court-approved repayment of capital, Parthus shareholders will also receive $60 million (68 million euros or £42 million) in the transaction.
ParthusCeva will focus on both DSP cores and platform-level IP solutions based around digital signal processing. Key areas will include design-core offerings for Bluetooth wireless connections, GPS, W-CDMA third-generation (3G) cell phones, VolP (voice over Internet protocol), and MP3 audio players, said officials. The merged company will have a combined net cash position in excess of $80 million, said DSP Group and Parthus.
"DSP technology is fundamental to our customers as they target their products at high growth markets such as wireless communications, mobile computing, automotive, consumer entertainment and computer networking," said Kevin Fielding, president of nine-year-old Parthus. Fielding will become chief executive officer of ParthusCeva. He said the combination of DSP Group's digital signal processing cores with Parthus' portfolio of platform-level IP cores will uniquely position the new company for integrated solutions based on an open-standard processor architecture.
"The merger of our two companies will create what we believe to be the leading independent provider of DSP-based IP solutions with strong customer penetration of many of the world's largest semiconductor companies and OEMs," stated Eli Ayalon, chairman and CEO of Silicon Valley-based DSP Group. Ayalon will become the chairman of ParthusCeva once the merger is completed.