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Silicon Labs to Acquire Energy Micro, a Leader in Low Power ARM Cortex-Based Microcontrollers and Radios

  Silicon Labs to Acquire Energy Micro, a Leader in Low Power ARM Cortex-Based
  Microcontrollers and Radios

Companies’ Combined Portfolios Enable the Internet of Things, Smart Energy and
                             Portable Electronics

Business Wire

AUSTIN, Texas & OSLO, Norway -- June 7, 2013

Silicon Labs (Nasdaq: SLAB), a leader in high-performance, analog-intensive,
mixed-signal ICs, today announced that it has signed a definitive agreement to
acquire Energy Micro AS. Based in Oslo, Norway, the late-stage privately held
company offers the industry’s most power-efficient portfolio of 32-bit
microcontrollers (MCUs) and is developing multi-protocol wireless RF solutions
based on the industry-leading ARM® Cortex-M architecture. Energy Micro’s
energy-friendly MCU and radio solutions are designed to enable a broad range
of power-sensitive applications for the Internet of Things (IoT), smart
energy, home automation, security and portable electronics markets.

This strategic acquisition accelerates Silicon Labs’ growth opportunities and
positions the company as the foremost innovator in energy-friendly embedded
solutions. The growth of the IoT market, coupled with continued deployment of
smart grid and smart energy infrastructure, is driving strong demand for
energy-efficient processing and wireless connectivity technology to enable
connected devices in which low-power capabilities are increasingly important.
Industry experts predict that the number of connected devices for the IoT will
top 15 billion nodes by 2015 and reach 50 billion nodes by 2020.

Energy Micro’s portfolio complements Silicon Labs’ 32-bit Precision32™ MCU,
Ember® ZigBee® and sub-GHz wireless products and targets a growing embedded
market. The acquisition greatly expands Silicon Labs’ MCU portfolio, adding
nearly 250 ARM-based EFM32 Gecko MCU products ranging from extreme-low-power,
small-footprint MCUs based on the ARM Cortex-M0+ core to higher-performance,
energy-friendly MCUs powered by the Cortex-M4 core capable of DSP and
floating-point operations. The acquisition is expected to enhance Silicon
Labs’ radio portfolio with the addition of Energy Micro’s ultra-low-power EFR
Draco radio products. These versatile wireless transceivers and system-on-chip
(SoC) devices will support frequency bands ranging from sub-GHz to 2.4 GHz and
multiple standard and proprietary protocols including Bluetooth Low Energy
(LE), 6LoWPAN, ZigBee, RF4CE, 802.15.4(g), KNX, ANT+ and additional protocols.

“Silicon Labs and Energy Micro share a complementary vision of a greener,
smarter, wirelessly connected world, and the foundation for this combined
vision is ultra-low-power technology enabled by each company’s innovative
mixed-signal design,” said Tyson Tuttle, president and CEO of Silicon Labs.
“This acquisition combines two proven leaders in nano-power MCU and wireless
SoC design into a formidable force that will accelerate the deployment of
energy-friendly solutions across the Internet of Things and smart energy
industries.”

The company expects the addition of Energy Micro’s EFM32 Gecko MCUs and EFR
Draco Radios, ultra-low-power technology expertise, energy-aware Simplicity
development tools, and world-class design and applications teams will drive
the rapid expansion of its Broad-based business. Silicon Labs intends to apply
these complementary embedded technology platforms and expertise to enable the
industry’s most energy-efficient solutions for the burgeoning IoT and smart
energy markets, as well as the proliferation of battery-powered portable
electronics devices. In addition, both companies’ 32-bit MCU and wireless
products leverage the same ARM Cortex-M architecture, which is expected to
accelerate the combined roadmap and support rapid adoption among the existing
customer base.

“The Energy Micro team is excited to join Silicon Labs,” said Geir Førre,
president and CEO of Energy Micro, who after the closing, is expected to
become vice president and general manager of Silicon Lab’s Energy-Friendly
Microcontroller and Radio business unit, based in Oslo. “Silicon Labs’
excellent resources and technology will help the combined company develop new
products and gain market share more quickly. The combination of our broad
portfolios of energy-friendly MCU, radio, wireless connectivity and sensing
solutions will redefine ‘ultra-low power’ for the embedded industry. Our
unified solutions will give customers a large choice of 32-bit microcontroller
and sub-GHz, ZigBee and Bluetooth LE connectivity options based on the most
energy-efficient ARM platforms in the industry,” he said.

Terms and Guidance

Under the agreement, the shareholders of Energy Micro will receive an up-front
payment of $115 million in cash, plus approximately $55 million in deferred
and earn-out consideration. The acquisition is being funded from balance sheet
cash resources and will require no borrowing. Energy Micro is expected to
contribute approximately $7 million in revenue in the second half of 2013.
Anticipated growth is expected to allow the transaction to be accretive on a
non-GAAP basis by the end of 2014. The boards of each company have approved
the acquisition, which awaits the satisfaction of customary closing
conditions. The deal is expected to close in July 2013. Additional financial
details and guidance will be provided in the Silicon Labs’ second quarter
earnings call planned for July 25, 2013.

Conference Call

Silicon Labs will be hosting a conference call to discuss the acquisition
today, June 7 at 7:30 am Central time. Participants can access the webcast
from the Investor Relations section of the company website at www.silabs.com.

A replay will be available after the call on the investor page of the website
listed above or by calling (855) 859-2056 or (404) 537-3406 (international)
and entering passcode 88866324. The replay will be available through June 21,
2013.

About Energy Micro

Energy Micro, based in Oslo Norway, develops and markets the world’s most
energy-friendly microcontroller and radio products based on ARM Cortex-M
processor cores. Consuming a quarter of the energy of competing products, the
company’s award-winning EFM32 Gecko MCUs and EFR4 Draco radios target
energy-sensitive applications across the embedded industry and are supported
by Energy Micro’s developer-friendly Simplicity Studio, which can reduce
embedded system development times by a half. The company was founded in 2007
by experienced semiconductor professionals with previous expertise from
Chipcon, Texas Instruments, Atmel and Nordic Semiconductor. Energy Micro is
backed by leading Nordic investors Northzone Ventures and Investinor. For more
information about Energy Micro, visit www.energymicro.com.

About Silicon Labs

Silicon Labs is an industry leader in the innovation of high-performance,
analog-intensive, mixed-signal ICs. Developed by a world-class engineering
team with unsurpassed expertise in mixed-signal design, Silicon Labs’ diverse
portfolio of patented semiconductor solutions offers customers significant
advantages in performance, size and power consumption. For more information
about Silicon Labs, please visit www.silabs.com.

Cautionary Language

This press release contains forward-looking statements based on Silicon Labs’
current expectations. The words “believe,” “estimate,” “expect,” “intend,”
“anticipate,” “plan,” “project,” “will,” “expanding,” “growing,” and similar
phrases as they relate to Silicon Labs or Energy Micro are intended to
identify such forward-looking statements. These forward-looking statements
reflect the current views and assumptions of Silicon Labs and are subject to
various risks and uncertainties that could cause actual results to differ
materially from expectations. Among the factors that could cause actual
results to differ materially from those in the forward-looking statements are
the following: risks related to the successful completion of the development
and implementation of Energy Micro’s technology, risks that the acquisition
may not yield the expected benefits due to the failure to properly integrate
the acquired business and employees; risks that the acquired business’
products and processes under development may fail to achieve market
acceptance; risks of disputes regarding the acquired business and intellectual
property; risks that the performance of Silicon Labs’ existing business may
not offset the dilutive effects of the acquisition; risks associated with the
competitive and cyclical nature of the semiconductor industry and other
factors that are detailed in Silicon Labs’ filings with the SEC. Silicon Labs
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.

Note to editors: Silicon Laboratories, Silicon Labs and the Silicon Labs logo
are trademarks of Silicon Laboratories Inc. All other product names noted
herein may be trademarks of their respective holders.

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Contact:

Silicon Labs
Investor Relations:
Deborah Stapleton, 650-815-1239
deb@stapleton.com
or
Trade Press:
Susan Nayak, 512-532-5318
susan.nayak@silabs.com
 
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