News: Microelectronics
9 October 2023
CML completes acquisition of Microwave Technology
UK-based CML Microsystems Plc, a designer and fabless manufacturer of mixed-signal, RF and microwave semiconductors for wireless communications applications, has completed its acquisition of Silicon Valley-based semiconductor firm Microwave Technology Inc (MwT)
Founded in 1982, MwT designs and manufactures gallium arsenide (GaAs)- and gallium nitride (GaN)-based monolithic microwave integrated circuits (MMICs), discrete devices, and hybrid amplifier products for commercial wireless communication, defense, space and medical (MRI) applications. It became part of the IXYS Corp, which was then acquired in 2018 by Chicago-based technology manufacturing company Littelfuse Inc. In 2019, MwT underwent a management buy-out from Littelfuse, while transitioning away from manufacturing to a fabless semiconductor model with a specific focus on MMICs. The business has 20 staff and operates from its sole location in Fremont, CA.
CML says that the acquisition expands its product portfolio, strengthens and enhances its support resources and increases its R&D capabilities, providing essential know-how and experience in system-level understanding, product manufacturing and packaging techniques. MwT’s products are complementary to CML’s existing range, and most of its focus and client concentration is within the USA. CML’s board believes that there is a significant opportunity to increase its current market share by internationalizing MwT’s products.
“Their dedicated and very experienced team will accelerate our multi-year growth strategy, enhancing the group’s existing competencies, whilst the strong cultural synergies bode well for the combined businesses over the medium term,” comments CML’s group managing director Chris Gurry.
MwT’s unaudited US GAAP results for 2022 recorded revenue of $6.5m and a pre-tax loss of $132,000 with net assets of circa $2.4m. The board expects that MwT will be earnings enhancing in its first full year of ownership within CML.
MwT’s chairman Dr Nathan Zommer (previously MwT’s majority shareholder) will join CML’s board of directors in a non-executive capacity (subject to completion of normal regulatory due diligence checks).
The total sum payable for the acquisition is $13.18m (comprising $7.65m in cash and $5.53m in shares). The cash element, which is subject to customary post-completion adjustments, is payable in four tranches: $1.93m on completion, $1.17m on the six-month anniversary of completion, $2.65m on the first anniversary of completion, and $1.9m on the second anniversary of completion (with the latter three payments being subject to performance-related adjustments). The $5.53m share element is payable via the issue to the sellers of 864,349 new CML ordinary shares of 5 pence each, valued at a price of 440 pence per share, being the volume-weighted average price of CML’s shares for the 30 days prior to the initial announcement of the transaction on 17 January, to be issued in three tranches: 592,010 shares on completion, 90,780 shares on the first anniversary of completion, 90,780 shares on the second anniversary of completion, and 90,779 shares on the third anniversary of completion.
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