CHANDLER, Arizona - May 22, 2002 -- Microchip Technology (NASDAQ:MCHP) Incorporated announced today that it has signed a definitive agreement to acquire PowerSmart, Inc., a privately held fabless semiconductor company. Microchip will pay approximately $54 million in cash, and will assume a balance sheet with approximately $4 million in cash and other net assets, and assume certain employee stock options. The transaction has been approved by the boards of directors of both companies and is expected to close by June 15, 2002, following approval by PowerSmart&'s stockholders.
Headquartered in Shelton, Connecticut, and with operations in Plano, Texas and Needham, Massachusetts, PowerSmart is a four-year oldcompany formed as a spin-off from Duracell with about 40 employees. PowerSmart develops and sells high-accuracy field-programmable embedded control ICs and battery sensors based on these ICs. PowerSmart posted net sales of approximately $1 million in calendar year 2001, and is expected to contribute approximately $7 to $8 million in revenue to Microchip in fiscal year 2003, and about $14 to $16 million in revenue in fiscal year 2004.
"This acquisition will complement Microchip&'s microcontroller offerings in the office automation, consumer and automotive market segments by strengthening our position in battery management applications such as laptop computers, personal digital assistants, cellular telephones, digital cameras, digital camcorders, uninterruptable power supplies and Hybrid Electric Vehicles," said Steve Sanghi, Microchip President and Chief Executive Officer. "PowerSmart&'s leading edge technology in battery management combined with our microcontrollerinfrastructure in marketing, sales, applications, development tools and manufacturing will position us well to take advantage of a strong trend towards mobility and portability requiring battery powered devices."
PowerSmart&'s President and CEO, J. Norman Allen said, "Over the last four years, PowerSmart has developed the most accurate and cost effective smart battery ICs now available, including our recently launched Accuron IC for laptops. While at Duracell, key members of the PowerSmart team originally developed the Smart System Standards in cooperation with Intel Corporation. We are now pleased to join hands with microcontroller powerhouse Microchip Technology, whose IC technology, in house fabrication, and selling channels will greatly enhance our ability to provide customers with leading edge products in battery management across the full spectrum of battery dependent devices."
Steve Sanghi added, "Excluding transaction related charges, Microchip is tracking extremely well towards its net sales and EPS guidance provided in our April 25, 2002 earning release and conference call. April was a very good month for Microchip. The strength in bookings that we saw in the March quarter has continued through April and into May. We have successfully ramped wafer starts in our fabs, positively impacting gross margins. We have also successfully raised average selling prices on certain Serial EEPROM products, as supply is continuing to tighten in the marketplace."
About Microchip:
Microchip Technology Inc. manufactures the popular PICmicro field-programmable RISC microcontrollers, which serve 8- and 16-bit embedded control applications, and a broad spectrum of high-performance linear and mixed-signal, power management and thermal management devices. The Company also offers complementary microperipheral products including interface devices; microID RFID devices; serial EEPROMs; and the patented KEELOQ® security devices. This synergistic product portfolio targets thousands of applications and a growing demand for high-performance designs in the automotive, communications, computing, consumer and industrial control markets.
The Company's quality systems are ISO 9001 (1994 version) and QS9000 (1998 version) certified. Microchip is headquartered in Chandler, Arizona with design facilities in Mountain View, California and Bangalore, India; semiconductor fabrication facilities in Tempe and Chandler, Arizona and Puyallup, Washington; and assembly and test operations near Bangkok, Thailand. Microchip employs approximately 2,950 people worldwide and has sales offices throughout Asia, Europe, Japan and the Americas. More information on the Company can be found at http://www.microchip.com/.
About PowerSmart:
PowerSmart, Inc., provides high accuracy smart battery and charger ICs for use with all battery chemistries, including lithium ion, nickel metal hydride, nicad, and lead acid. PowerSmart also provides complete smart battery development and production tools including its PowerTool suite of Windows®-based software. PowerSmart&'s Microelectronics division, located in Plano, Texas, designs and develops all PowerSmart products for laptops and other portable devices. PowerSmart&'s Systems division, located in Needham, Massachusetts integrates these ICs into PowerSmart&'s line of battery sensor products for larger battery systems and hybrid electric vehicles. Headquarters for PowerSmart, Inc., are located at One Research Drive, Shelton, Connecticut 06484, (203) 925-1340. More information on the Company can be found at http://www.powersmart.com/.