SAN FRANCISCO—Analog and mixed-signal chip vendor Silicon Laboratories Inc. said Monday (May 21) it signed a definitive agreement to acquire wireless mesh networking technology firm Ember Corp. for about $72 million.
Ember (Boston) is a late-stage private company offering silicon, software and development tools for 2.4 GHz wireless mesh networking solutions being deployed in smart energy, connected home, security, lighting and other monitoring and control applications. Ember is a pioneer in the market for 802.15.4 ZigBee solutions and has been developing mesh networking technology since the concept was first conceived, according to Silicon Labs.
Silicon Labs (Austin, Texas) said the $72 million purchase price is subject to an adjustment for certain working capital amounts and potential earn-out consideration. The firm said acquisition would bring Silicon Labs the technology and software expertise needed to enable the low-power mesh sensor networks being deployed today in a wide range of residential, commercial and industrial applications.
Ember's portfolio is expected to complement Silicon Labs' products and target a growing market estimated to increase from $100 million in 2012 to $600 million by 2016, Silicon Labs said. The combination of the companies’ products will bring together microcontroller, power and isolation technology, sensors, and both sub-GHz and 2.4 GHz wireless radios into a portfolio of integrated networking solutions for embedded systems, the firm said.
The demand for low-power, small-footprint wireless technology is accelerating as more and more IP-enabled end points are being connected to the "Internet of Things." According to Silicon Labs, this is expected to be the first 10 billion-unit-per-year market and is expected to enable more convenient, energy-efficient and safer home and work environments.
"This acquisition of a high-caliber team with proven wireless mesh networking know-how accelerates our ability to offer complete system solutions to our customers," said Tyson Tuttle, president and CEO of Silicon Labs, in a statement.
Silicon Labs said Ember is expected to contribute approximately $10 million to $12 million in revenue in the second half of 2012 and to be accretive on a non-GAAP basis in 2013. The boards of each company have approved the acquisition, which must still win regulatory approval and satisfy other customary closing conditions, Silicon Labs said.
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