LONDON – Toumaz Ltd. (Abingdon, England) has agreed to buy fabless DAB radio chip firm Frontier Silicon (Holdings) Ltd. (London, England) for up to £32.3 million (about $50 million).
As a result Anthony Sethill, founder and former CEO of Frontier and now CEO of Toumaz, will get to resume leading the team of people he left at the end of 2011.
Toumaz, a developer of low-power wireless technology it applies to medical applications, said it intends to raise £29.25 million (about $46 million) before expenses to put towards the purchase of Frontier through a placing of 285.6 million shares.
Frontier, founded in 2001, is a supplier of chips for digital audio and audio subsystems. Frontier has around 130 staff, 70 percent engineers, with R&D centers in Cambridge, Ireland and Hong Kong.
Both companies are strongly linked to graphics processor IP licensor Imagination Technologies Group plc. Imagination has acted as a strategic partner and supporter of both Toumaz and Frontier and both companies supply chips to Imagination's Pure consumer electronics equipment subsidiary.
The deal has been constructed so that Toumaz will pay an initial £27.06 million (about $42.5 million) in cash with a deferred consideration up to £5.2 million (about $8.2 million), which will be paid, dependent on the performance of the enlarged company.
Toumaz emphasized that the deal is a good fit as Toumaz' medical aspirations fit with the consumer profile of Frontier. Frontier has in excess of £22 million ($34 million) in annual revenue and the acquisition would give Toumaz access to a customer list that includes Bang & Olufsen, Bose, JVC, Panasonic, Philips, Pure, LG, Roberts Radio and Sony.
"Bringing these two innovative UK technology companies will enable the enlarged Group to exploit the strengths and opportunities of both businesses. Our wireless solutions have huge potential and combined with the software systems, commercial expertise and tier one customer access of Frontier, will create a significant total solution provider for the wireless communications market," said Toumaz CEO Sethill, in a statement.
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