MIPS to buy analog IP player for $147M

By Colleen Taylor, Contributing Editor -- Electronic News, 8/27/2007

Processor architecture and core provider MIPS Technologies Inc. announced today plans to acquire Lisbon, Portugal-based analog and mixed signal intellectual property (IP) provider Chipidea Microelectronica S.A. for a $147 million cash payment.

Under the terms of the deal, the Mountain View, Calif.-based MIPS said it will pay an additional performance-based milestone payment of 610,687 shares of its common stock in 2009. At today's closing, MIPS Technologies said it 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.

"Chipidea is the clear leader in analog IP with a broad product base, an impressive array of customers worldwide and excellent financials," John Bourgoin, MIPS Technologies' president and CEO, said today in a statement. "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."

Chipidea has been a privately-held company since it was founded in February 1997 by 3 professors of the electronics and computer engineering department of the Technical University of Lisbon with a scientific background in analog integrated circuit design. Earlier this year, the company closed on some $6.6 million in a Series C funding round of funding.

Following the transaction, Chipidea will become a newly-formed business group within MIPS Technologies, with its complete product portfolio continuing to be sold under the Chipidea brand. Current Chipidea president and CEO 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. The transaction is expected to be accretive to non-GAAP EPS by quarter end June 30, 2008.