Inphi Corporation (NYSE: IPHI), a provider of high-speed data movement interconnects, today announced that it has signed a definitive agreement to acquire eSilicon for $216 million in both cash and the assumption of debt.
“The Inphi team is excited to enhance our value proposition to our cloud and telecom customers with the addition of the eSilicon team and IP,” said Ford Tamer, president and CEO of Inphi. “eSilicon adds to Inphi world-class 2.5D packaging, SerDes, custom silicon and operations teams. Just as we successfully leveraged our Cortina and Clariphy acquisitions, eSilicon will advance our shared commitments in driving successful customer engagement, industry-leading innovation, and best of class execution.”
Inphi has familiarity with the eSilicon team and opportunity through past interactions, investment, and an ongoing board observer seat. Once complete, Inphi expects the acquisition would:
- Combine Inphi’s DSP, TiA, Driver and SiPho disciplines with eSilicon’s 2.5D packaging and custom silicon design capabilities and accelerate the roadmap for electro-optics, 5nm advanced CMOS process node, and custom DSP solutions
- Augment Inphi’s existing SerDes team and resources
- Extend Inphi’s addressable market in Cloud data center networking and Telecom 5G infrastructure with top tier OEM customers
- Expand Inphi’s presence into new, strategic geographies for talent acquisition with engineering design centers in Italy, Romania, Vietnam, and Spain and operations in Malaysia
- Add between $80 to $120 million to 2020 revenue, be accretive to 2020 EPS and both the 2021 revenue and EPS growth rates
- Increase Inphi’s operational scale with suppliers, lowering costs and resulting in financial leverage
- Result in Inphi paying about 2.2X 2020 revenue in a combination of cash and debt assumption
The acquisition is expected to close in the fourth quarter of 2019, subject to US and Vietnamese regulatory approval and customary closing conditions. Concurrent with the signing of the definitive agreement, eSilicon has sold its Embedded Memory IP (SRAM, TCAM, and multi-port memory compiler) and Interface IP (HBM and HBI) assets to Synopsys Incorporated.