The San Jose-based company, which makes microcontrollers and touchscreen chips, said the deal will allow it to develop a variety of IoT products, including home and building automation equipment and consumer devices that require longer battery life.
"This acquisition immediately adds 802.11n Wi-Fi and Bluetooth to our offerings and will accelerate our introduction of low-energy Bluetooth products," said Atmel's President and CEO Steve Laub.
"Combined with our existing Wi-Fi and Zigbee solutions and industry-leading microcontroller portfolio, Atmel is positioned for substantial growth in the internet of things marketplace."
The deal, expected to be completed in the third quarter of the year, includes an additional earn-out of up to $30m to be paid out if future revenue targets are achieved over the next two years.
Atmel, which will fund the deal with cash on hand and borrowings, also expects the deal to add to its adjusted financials in the second half of 2015.
The deal comes as a growing number of companies, such as Google and Qualcomm, collaborate or work alone to develop standards for smart devices.
Last month a group of 40 UK-based companies, including IBM, ARM and BT, announced an Internet of Things (IoT) standard called Hypercat, they claims will encourage an open standards based IoT.
Newport Media, based in California, earned $43m in revenue in 2013 and also raised $15m back in 2010.