Dialog Semiconductor will buy iWatt, a provider of digital power management ICs, for $310 million.
The acquisition will be funded from both Dialog’s existing cash resources and additional debt facilities of $125 million.
The acquisition of iWatt, which provides AC/DC digital power management technology, enables Dialog to strengthen its position in power management for tablets and smartphones.
Dialog Semiconductor will be able to diversify into the power management semiconductor market that is expected to touch $11.5 billion by 2015 as per Gartner.
In addition, Dialog can add two product families including AC/DC charger adaptor ICs and a broad range of LED Solid State Lighting ICs.
The power management, audio and short-range wireless technologies company will also add Tier-1 customers and can expand Dialog’s business opportunities at existing smartphone Tier-1 OEMs as part of the growth strategies.
iWatt has been shipping products to numerous top-tier customers and is expected to increase its future business opportunities with market leading customers such as Samsung, HTC and Nokia in the portable segment, and GE, Osram and Philips in the fast growing solid state lighting market.
iWatt posted revenue of $74 million in 2012, up 46 percent over 2011, with an associated gross margin of 49 percent compared to 45 percent in 2011.
“We see the acquisition as highly complementary to our existing PMIC business enabling Dialog to address adjacent emerging power management segments, including cutting-edge AC/DC solutions for next generation fast portable chargers as well as ICs for LED solid state lighting,” said Dialog CEO Jalal Bagherli.
The acquisition expands Dialog’s addressable market into the adjacent digital power management space, unlocking new growth opportunities and increasing TAM by a potential $1.8 billion to $5.9 billion by 2015.
