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US-based MaxLinear acquires Entropic for $287 mn

MUMBAI: MaxLinear, a leading provider of integrated radio frequency (RF) and mixed-signal integrated circuits (ICs), has signed a definitive agreement to acquire Entropic Communications, a leader in semiconductor solutions for the connected home.

The implied total transaction value is approximately $287 million and the implied enterprise value is $181 million, net of Entropic’s cash balance as of 31 December 2014. The boards of directors of both MaxLinear and Entropic have unanimously approved the transaction.

Shareholders of MaxLinear and Entropic will own approximately 65 per cent and 35 per cent, respectively, following the completion of the acquisition.

The acquisition will significantly enhance the scale of MaxLinear’s analogue/mixed-signal business, expanding its addressable market and enhancing the strategic value of MaxLinear’s offerings to its broadband and access partners, OEM customers and service providers. MaxLinear sees immediate cross-selling opportunities and longer-term platform integration opportunities with Entropic’s leading MoCA technology.

In addition to broadening MaxLinear’s presence in its existing markets, Entropic adds immediate scale and deep customer relationships to MaxLinear’s most recent growth area of the satellite pay TV market. Entropic’s design talents and portfolio of approximately 1,500 issued and pending patents are highly complementary, and MaxLinear is uniquely positioned to capitalise on these assets.

“We are excited about the opportunity to bring together two talented and largely complementary teams, as we increase our capabilities to solve the most difficult analogue and mixed-signal RF challenges in broadband markets,” said MaxLinear CEO Dr Kishore Seendripu.

“We believe the scale and strategic benefits of a broader technology portfolio will enable us to accelerate our expansion into new markets more effectively. The financial benefits of the transaction should be immediately visible, as we expect non-GAAP earnings accretion in the first full quarter post-close.”

Entropic interim president and CEO Dr Ted Tewksbury commented, “I share Kishore’s enthusiasm for this combination, which we believe maximises value for Entropic’s shareholders, employees and customers. These are two excellent companies in the industry, and I believe our stakeholders will benefit from the resources and scale that the combination will provide.”

Headquartered in San Diego, Entropic is recognised for pioneering the MoCA (Multimedia over Coax Alliance) home networking standard, inventing Direct Broadcast Satellite (DBS) outdoor unit single-wire technology, and developing the industry’s first set-top box SoC platform based on the ARM processor with advanced OpenGL graphics.