BURLINGTON, Ontario, October 30, 2007 -- Gennum Corporation has announced it has acquired Snowbush Microelectronics, one of the leading suppliers of analog and mixed-signal intellectual property (IP) cores. This acquisition accelerates Gennum's new product introductions for 2008 and beyond, creating a compelling value proposition to customers as they gain access to an array of high-performance analog and mixed-signal solutions. This transaction further strengthens Gennum's design expertise and expands its engineering team in the greater Toronto area.
The transaction is forecasted to contribute approximately $10 million dollars in revenue to Gennum and be accretive in 2008. Since the company's inception in 1998, Snowbush has achieved profitability each year with a compound annual growth rate (CAGR) of 46 percent in revenue. Gennum is committed to rapidly growing its IP licensing business by augmenting the significant Snowbush IP portfolio with its own cores and also utilizing its global presence in Asia, Europe and North America to drive larger revenue contributions to the company.
According to Dr. Franz Fink, President and CEO of Gennum, "By leveraging the Snowbush IP, Gennum will introduce more innovative analog and mixed signal solutions to serve new, high-growth consumer connectivity markets while further securing market share in our traditional video and data communication segments. Additionally, we are well positioned to rapidly expand the IP licensing business. This, coupled with the experienced mixed-signal design team and extensive CMOS process expertise, makes Snowbush an ideal complement to drive future revenue growth."
Expanding Portfolio of Proven IP Cores
According to a June 2007 report on semiconductor IP revenue by market analyst firm Gartner, the market for foundation mixed-signal IP blocks and analog front ends grew strongly in 2006, at 23 percent over the previous year*. As sub-micron CMOS integrated circuits become more complex and encompass a broader set of IP blocks, IC companies are purchasing third-party IP to speed time to market and reduce overall design cost. With Snowbush's proven and highly differentiated IP portfolio, Gennum now becomes a significant player in the IP supplier space.
Additionally, by leveraging Snowbush's CMOS process design expertise and existing partnerships with global foundry partners, Gennum immediately gains access to key manufacturing facilities and CMOS-based 90 nanometer (nm), 65nm and 45nm process nodes to develop unique, highly integrated analog and mixed-signal products.
The Snowbush IP includes a variety of silicon-proven, serializer/deserializer (SERDES) cores which are a critical element of high-speed data communications and video applications such as internet routers and high-definition (HD) broadcast equipment. Snowbush also offers standards-based IP cores, such as PCI Express® 2.0, an emerging high-speed interconnect protocol that is being integrated into next-generation HD broadcast, medical and industrial applications. Additionally, Snowbush's analog cores, such as high-speed data converters, enable the conversion of analog signals to digital signals - a key feature for such devices as set-top boxes and video cameras.
Snowbush Leadership Joining Gennum Team
Privately-owned, Snowbush is headquartered in Toronto, and hosts a large pool of world-class design engineers that have developed some of the most complex analog and mixed-signal circuits in the market today. Snowbush also has a design center located in Aguascalientes, Mexico which is well positioned to attract additional design talent and expand Gennum's presence in that region.
Snowbush president and co-founder, Dr. Ken Martin, will become Gennum's new Chief Technology Officer. Prior to founding Snowbush, he acted as a consultant for many industry-leading microelectronics companies. Dr. Martin also has a wealth of academic experience holding a tenured position as Full Professor at UCLA and then at the University of Toronto with an Endowed Professorship. Snowbush senior vice president and co-founder, Dr. David Johns, will also join Gennum as its Vice President of IP Licensing. Dr. Johns, who also has a wealth of academic and industrial experience, will be charted with growing the IP business and integrating key blocks into future Gennum products. Together, Dr. Martin and Dr. Johns have published over 200 technical design papers, are inventors or co-inventors on numerous patents and jointly authored a highly successful textbook on advanced analog circuit design. Both Dr. Martin and Dr. Johns are Fellows of the IEEE®.
Dr. Fink continued, "Dr. Martin and Dr. Johns are incredible assets and welcomed additions to the Gennum team. Their unparalleled design expertise and seasoned leadership skills will enable Gennum to define and execute an aggressive technology plan to accelerate new product development as well as significantly grow our IP licensing business driving top-line growth. Additionally, their strong relationships with world-class university engineering programs will help Gennum attract key talent to our growing team."
Terms of the Transaction
Under the terms of the transaction, Gennum will pay approximately $20.3 million in cash and $3.7 million in stock to acquire Snowbush. Gennum intends to purchase these shares out of the market. Approximately, 63 percent of the purchase price will be paid on closing with the remainder paid over a three year period.
As part of the transaction, Gennum will acquire the rights to all Snowbush patents and the entire design and development team of approximately 50 employees. The former Snowbush headquarters in downtown Toronto and the design center in Aguascalientes, Mexico will become new office locations for Gennum.
Gennum Corporation (TSX: GND) designs innovative semiconductor solutions and intellectual property (IP) cores for the world's most advanced consumer connectivity, enterprise, video broadcast and data communications products. Leveraging the company's proven optical, analog and mixed-signal products and IP, Gennum enables multimedia and data communications products to send and receive information without compromising the signal integrity. A winner of a Technical Emmy® award for advances in high definition (HD) broadcasting, Gennum is headquartered in Burlington, Canada, and has global design, research and development and sales offices in Canada, Mexico, Japan, Korea, Germany, Taiwan and the United Kingdom. www.gennum.com