Small cell firm, Picochip sold to Mindspeed for £49.5m
Nasdaq-listed semiconductor firm, Mindspeed Technologies, is to pay up to $76.8 million (£49.5m) for Pichochip, a small cell base station developer headquartered in Bath with an office in Cambridge.
Mindspeed, itself a network infrastructure semiconductor firm, says the deal will make the enlarged group the clear leader in 3G/4G small base station solutions, a total addressable market that it says will reach $3 billion within four years.
Picochip is already a market leader in femtocell technology and claims to be provider of the world's single most common base station technology. Mindspeed is focused on low-power SoC products that drive video, voice and data applications in fibre-optic networks and enable advanced processing for 3G and LTE mobile networks.
Other companies are believed to have bid for Picochip, though no comment was the line given in a conference call earlier today.
The California based company will pay $51.8m (£33.4m) up front, split $27.5m cash and $24.3m Mindspeed shares, with a further earn out payment of up to $25m, payable in 2013. The acquisition has been approved by both boards of directors and is expected to close in the first quarter of 2012.
No details have yet been given about the future of Picochip's UK and overseas facilities where it employs some 150 staff, however, part of the rationale for the acquisition according to Mindspeed is the combination of R&D resources, which it says will create one of the largest small cell software, systems and SoC development groups in the wireless infrastructure sector.
As well as a Cambridge office, Jamie Urquhart, Arm co-founder and venture partner with Pond Ventures, an early investor in Picochip, sits on its board as a non-executive director.
Picochip has raised $111.5m since its incorporation in 2000 in equity finance as well as $9m financing from Silicon Valley Bank, which is also providing Mindspeed with a loan to back this acquisition. Picochip's investors include AT&T, Atlas Venture, Highland Capital Partners, Intel, Pond Venture Partners, Rothschild, Samsung, and Scottish Equity Partner
