Intel targets handhelds with $884M Wind River acquisition
Intel continues to look for growth opportunities beyond the traditional PC and server market segments and will acquire Wind River as it aims to extend itself in embedded systems and mobile handheld devices.
By Suzanne Deffree, Managing Editor, News -- EDN, June 4, 2009
Intel Corp announced this morning that it will acquire embedded computing systems-focused Wind River Systems Inc in a deal valued at approximately $884 million, as the chipmaker looks to continue to grow its processor and software presence outside the traditional PC and server market segments into embedded systems and mobile handheld devices.
"This acquisition will bring us complementary, market-leading software assets and an incredibly talented group of people to help us continue to grow our embedded systems and mobile device capabilities," said Renee James, Intel VP and general manager of the company's software and services group, in a statement. "Wind River has thousands of customers in a wide range of markets, and now both companies will be better positioned to meet growth opportunities in these areas."
Wind River will become an Intel wholly owned subsidiary and counts Alcatel-Lucent, BMW, Boeing, Motorola, NASA, Sony, and Verizon among its customers.
Intel made specific note of smart phones, MIDs (mobile Internet devices), and in-car infotainment systems as embedded systems and mobile devices growth areas for the company related to the coming acquisition. Overall, Intel will target the consumer electronics, automotive, networking equipment, aerospace and defense, and energy segments with the new subsidiary.
Wind River develops operating systems, middleware, and software design tools for a variety of embedded computing systems. Its main products include VxWorks, a proprietary and multicore-ready real-time operating system, and commercial-grade Linux software platforms. The company also provides design services and software expertise, including custom-built solutions, development tools, and device testing products.
The acquisition is expected to boost Wind River's Intel-architecture focused sales as it gains access to the company's technology investments, brand, employees, and global sales force.
Founded in 1981, Wind River is a publicly held company with headquarters in Alameda, Calif, with more than 1,600 employees and operations in more than 15 countries. During its fiscal year ended Jan. 31, 2009, Wind River reported annual revenues of $359.7 million. The company is slated to report on its fiscal Q1 this afternoon.
Under the agreement, Intel will acquire all outstanding Wind River common stock for $11.50 per share in cash, a 44% premium on Wind River's Wednesday closing price of $8. The stock, WIND, was up more than 44% and trading at $11.52 as of 9:40am eastern this morning. WIND closed today at $11.76, up 47%. Intel's stock, INTC, was also up in this morning's trading, climbing 1.57% to $16.19 as of 9:40am. INTC closed up 1.19% today at $16.13.*
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As an embedded software developer, I have major concerns about this acquisition. Wind River's vxWorks RTOS supports a large number of processors and does not favor any processor family or manufacturer. This has allowed vxWorks to become one of the most popular commercial RTOSs. Intel has a history of trying to lock designers into their hardware by giving them software with licenses binding a manufacturer to their hardware. For instance, Intel provided flash device driver software that was free as long as their flash parts were used. I believe Intel will try use Wind River to push their processors into future embedded designs.
Richard Gibbs - 2009-4-6 14:13:00 PDT -
How long do you think it will be until Wind River only supports Intel processors. Power PC will be stuck with Linux only.
Bob F - 2009-4-6 10:39:00 PDT
