SAN JOSE, Calif. - CSR plc has agreed to acquire troubled Zoran Corp. for $679 million.
U.K.-based CSR is a supplier of wireless connectivity and location chips. CSR sells Bluetooth, GPS, FM, Wi-Fi and audio devices. U.S.-based Zoran provides imaging and video chips for digital camera, home entertainment and multifunction printer products.
The merged company will provide differentiated, integrated technology that addresses the rapidly growing market for connected, location-aware multimedia devices including handsets, digital cameras and home entertainment equipment.
CSR’s chairman, CEO and CFO will lead the merged company. Levy Gerzberg, co-founder, president, CEO and director of Zoran will be joining the CSR board as a non-executive director. Zoran will also propose one additional independent non-executive director to join the CSR board.
Ron Mackintosh is CSR's chairman, Joep van Beurden is the CEO, and Will Gardiner is CFO.
In a statement, van Beurden, said: “Digital electronic devices are becoming increasingly connected and full of media-rich features, including the ability to stream images from your camera to your PC or video conferencing from your Smartphone. Zoran’s market leading imaging and video capabilities, combined with our own connectivity and location capabilities, make this a great opportunity for us. The same is true in the home entertainment space where wireless connectivity is increasingly being adopted in a range of consumer devices such as digital TVs – Zoran’s image technology combined with our connectivity skills will provide a differentiated proposition which will be appealing for our customers.''
Completion is expected in the second quarter of 2011 and is subject to CSR and Zoran shareholders and regulatory approvals and other customary closing conditions.
Under the terms, it is proposed that Zoran shareholders will receive 1.85 ordinary shares of CSR in the form of American Depositary Shares, for each share of Zoran common stock held. In addition, CSR announces that it intends to return up to $240 million to shareholders via an on-market share buyback program.
Loss-ridden Zoran has been in trouble for months. Recently, hedge fund Ramiusdelivered a letter to Zoran's directors and Gerzberg, saying it believed the company's shares are deeply undervalued, primarily due to long-term fundamental underperformance and repeated missed expectations for revenue growth and profitability. The hedge firm was seeking to take control of the company's board.
Zoran has rejected that offer several times.
Other acquisitions are taking place in the consumer IC market. Qualcomm Inc. will acquire rival wireless chip vendor Atheros Communications Inc. in a cash deal worth roughly $3.1 billion.
I think this buy makes sense. An immediate arena of applications for the merge could be Enhanced reality products. Combining image and geo-location can become a good deal.
Something new might even come up that involves imaging and connectivity like Bluetooth and Wi-fi.
CSR can become a broader solution vendor. CSR is beefing up!
It is a tough world out there - competition is extreme and in coming years, many more will go. I do not see the market because the Chinese firms have figured out to liberate design where they buy chipsets and come up with nice gadgets. Increasingly, legacy suppliers are not finding more markets.
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