MIPS acquires Chipidea

The combined entity becomes the second largest semiconductor design IP company and the number one analog IP company worldwide, based on Gartner, Inc.'s recent 2006 rankings. The acquisition creates a unique technology portfolio and delivers a powerful value proposition to customers as they gain access to a broad array of leading analog IP that fuels next-generation SoC (system on chip) designs. Under the terms of the transaction, MIPS Technologies will pay an aggregate of $147 million in cash, with an additional performance-based milestone payment of 610,687 shares of MIPS Technologies' common stock in 2009. At today's closing, MIPS Technologies will make an initial payment of approximately $120 million from its current cash reserves with the balance released from escrow within two years subject to an indemnification holdback and deferred payments for the Chipidea co-founders remaining with the company. "Analog represents an essential component of our IP growth strategy and has become one of the key strategic considerations in customer designs today," said John Bourgoin, president and CEO of MIPS Technologies. "Chipidea is the clear leader in analog IP with a broad product base, an impressive array of customers worldwide and excellent financials. The synergies of MIPS Technologies and Chipidea are compelling for our customers' SoC design initiatives. With Chipidea's impressive penetration across a broad range of high-growth embedded markets, and MIPS Technologies' relationships with a large array of customers, we expect to reap significant sales growth from the new partnership. We can offer a more comprehensive, integrated design solution, better serve existing markets, and strategically enter high-growth segments where analog is essential." "MIPS Technologies' commitment to the processor IP market remains unwavering," added Bourgoin. "We are fully committed to extending our leadership processor roadmap as we integrate the Chipidea family into MIPS Technologies." "The integration of two market leaders in the semiconductor IP market provides an exciting and powerful customer proposition," said Jose Franca, president and CEO of Chipidea Microelectrónica. "Our 10-year commitment to delivering the highest quality products has been the cornerstone of our market leadership and customer loyalty. MIPS Technologies was founded on similar business principles and has long been renowned as a thought leader dedicated to driving customer innovation in the embedded market. We remain proud of Chipidea's milestones and technology 'firsts' over the last decade, and are honored to take our business to a new level where we can truly drive the progression of the burgeoning IP market." "Chipidea remains committed to helping its customers achieve silicon success by maintaining the integral position in their design process that earned us our leading position in the market," said Franca. "MIPS Technologies views technology partnerships in much the same way, and together we will provide chip companies with the industry?s most visionary approach for microprocessor and analog IP integration so design teams can focus more acutely on innovation." Following the transaction, MIPS intends to quickly integrate the two companies and businesses. Chipidea will become a newly-formed business group within MIPS Technologies, with its complete product portfolio continuing to be sold under the Chipidea brand. Jose Franca will assume the role of president and general manager for the new business group and has been appointed a member of the board of directors for MIPS Technologies. Currently, Chipidea has more than 310 employees worldwide, including design centers in Portugal, France, Belgium, Poland, China, Norway, and Macau.