SAN FRANCISCO—In yet another takeover bid aimed at acquiring patents, Wi-LAN Inc. Wednesday (Aug. 17) said it would make an all-cash offer to acquire fellow Canadian technology licensing company Mosaid Technologies Inc. for about $490 million.
Wi-LAN (Ottawa, Canada), which licenses mostly technology for wireless networking, said it would offer about $38.77 ($38 in Canadian dollars) for each outstanding common share of Mosaid, which licenses mostly semiconductor memory and communications IP.
Excluding the cash on Mosaid's balance sheet, Wi-LAN said the offer represents a premium of about 31 percent over the closing price for Mosaid's share Wednesday. The offer represents a premium of about 38 percent over the volume-weighted average trading price of Mosaid's shares for the 10 trading days ended Aug. 16, Wi-LAN said.
Wi-LAN said the acquisition of Mosaid would create a stronger, more valuable technology licensing company with greater technology, business and geographic diversification and greater financial strength.
WiLAN said it has attempted to interest Mosaid's board in a merger on several occasions over the past several years and would welcome the support of Mosaid's board. “We will be presenting this offer directly to Mosaid shareholders for their consideration as we strongly believe that the complementary patent portfolios, diverse licensing programs, experienced teams and innovative research and development of WiLAN and Mosaid make this a compelling combination," said Jim Skippen, Wi-LAN's chairman and CEO, in a statement.
In recent weeks, several transactions proposed by high-tech firms have apparently been motivated by the acquisition of technology patents, most notably Google Inc.'s $12.5 billion offer to buy Motorola Mobility Inc. Monday. A consortium led by Microsoft Corp. and Apple Inc. also recently one an auction to purchase some 6,000 patents from bankrupt Canadian telecommunications equipment vendor Nortel Networks Corp. for $4.5 billion.
Mosaid offers two main licensing programs, one for semiconductor technology and one for telecommunications technology. The company claims for than 2,001 patents to its credit.
Mosaid (Ottawa) bills itself as one of the world's leading intellectual property companies, focused on the licensing and development of semiconductor and communications technologies. Mosaid says its licensees include many of the world's largest semiconductor companies.
Mosaid has frequently used litigation to force companies to license its technology and is currently involved in litigation with several semiconductor vendors. Last week, the company expanded a lawsuit against Japanese memory chip vendor Elpida Memory Inc. to include claims of infringement of another Mosaid-owned patent.
According to Wi-LAN, the combination of Wi-LAN and Mosaid would have more than 4,200 patents related to wireless, wireline, consumer electronics and semiconductor technologies.
Skippen, who spent 10 years as an executive at Mosaid, said he looks forward to working again with Mosaid's management and employees. He called the combination of Wi-LAN and Mosaid a "natural" strategic fit.
"It is my belief that to succeed in today’s market, bigger is better," Skippen said. "Since joining Wi-LAN my vision has been to increase the company’s scale with a deeper, larger patent portfolio to make it more compelling for potential licensees to choose a license over litigation. While an ambitious goal, we have been very successful. Combining Wi-LAN and Mosaid is the next logical step."