TUALATIN, Ore.-- Pixelworks Inc. today announced it will acquire privately-held nDSP Corp. of Campbell, Calif., which supplies video processing ICs for enhanced displays in televisions, multimedia projectors, and flat-panel displays.
Pixelworks said it has reached an agreement with nDSP to buy the four-year-old company for stock valued at about $21.3 million, based on Friday's closing share prices. A total of 1.2 million shares of stock will be exchanged for ownership of nDSP under the agreement.
"The acquisition of nDSP is a great fit with Pixelworks," said Allen Alley, president, CEO and chairman of the Oregon-based supplier of ICs for display applications. "They bring us low-cost, exceptionally high quality video processing technology, exciting new products, and an experienced team of video processing engineers who have developed cost effective, cutting-edge video IP intellectual property."
He said Pixelworks will gain 24 development and support engineers located in Beijing and Shenzhen, China, from the acquisition. The move will establish Pixelworks' presence in China "where over one-third of the world's televisions are manufactured today," Alley said. "We expect to see more and more display products manufactured in China, so expanding our presence there is of great importance."
Campbell-based nDSP has a total of 44 employees. Pixelworks said it expects nDSP to generate revenue of $500,000 in the first quarter of 2002. The company said nDSP revenues are expected to total $5-to-$7 million for all of 2002.
Pixelworks said nDSP's patent-pending video processing technology dramatically improves television image quality through frame rate conversion, interlaced to progressive scan conversion, noise reduction, motion compensation, sharpness enhancement, and resolution enhancement. Pixelworks said it will add nDSP chips to its SignalProcessor product line. The nDSP chips are expected to complement Pixelworks' ImageProcessor system-on-a-chip ICs and reconfigurable digital signal processor (DSP) video technology from Jaldi Semiconductor Corp.--a Toronto startup, which received a $7.5 million investment from Pixelworks early this year.
The expanded technology portfolio will be used to offer new chip sets and highly integrated solutions for video products in a full range of applications, said Pixelworks.
The acquisition of nDSP is expected to be accretive to pro forma earnings per share by the third quarter of 2002, said the company. The merger transaction is expected to close within 45 days.