LONDON — IPTV chip developer Sigma Designs (Milpitas, Calif.) is acquiring for about $160 million CopperGate Communications (Tel Aviv, Israel).
The deal combines Sigma's capabilities in IPTV set-top boxes and related gear to CopperGate's expertise in silicon parts targeting home networking technologies, specifically HomePNA and HomePlug AV.
The deal was first flagged late last month.
CopperGate and Sigma have both been major supporters of the HomeGrid Forum and the ITU-T process to adopt the G.hn home networking the standard.
"Our acquisition of CopperGate's leading home and MDU solutions further strengthens our opportunities in this market. Having developed three generations of ITU/HomePNA ICs since 2005 with over 12 million ICs shipped, CopperGate has proven itself a leader in the IPTV market," said Thinh Tran, Sigma's Chief Executive Officer.
By combining forces, the companies said they would be able "to launch a more comprehensive set of solutions and capitalize on a broader range of market opprtunities."
The combination of Sigma and CopperGate is expected to yield several potential synergies including synergies from leveraging manufacturing know-how and combined wafer sourcing, further SoC integration and combined research and development.
The cash-and stock deal means Sigma will pay about $92 million, plus the amount of cash and cash equivalents estimated to be held by CopperGate at the closing, net of CopperGate transaction expenses and debt outstanding at the closing.
Sigma will also issue shares of its common stock to CopperGate shareholders estimated at the time of signing to equal approximately 4.0 million shares.
Sigma will also pay up to an aggregate of $5.0 million in cash to specified CopperGate employees, provided that they remain employed by Sigma and certain milestones are achieved.
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