Combine forces to increase their presence in the GPS market
Bluetooth company CSR has agreed to acquire GPS chipmaker SiRF, which will be integrated into a new CSR US subsidiary.
SiRF shareholders will receive 0.741 of an ordinary share in CSR for each SiRF share, representing a premium of approximately 91% on the closing share price of $1.08 on February 9. This values SiRF at approximately GBP91m ($136m). Following the merger, SiRF shareholders will own approximately 27% of the enlarged CSR group.
CSR said the acquisition will diversify its revenue base and increase its presence in the GPS market. It said it will also provide annual cost synergies of at least $35m. SiRF generated revenue of $232m for financial year 2008, while CSR generated $695m. The merger is expected to complete in the second quarter of 2009 incurring a one-off charge of $15m.
The company will invite Dado P Banatao, chairman and acting CEO of SiRF, and Kanwar Chadha, founder of SiRF, to join the CSR Board as non-executive director and executive director, respectively.
Joep van Beurden, chief executive at CSR, said: Financially, strategically, and commercially, this is a compelling transaction. Combined revenues of CSR and SiRF totaled $927m in 2008. Strategically, the deal considerably strengthens our leadership position in the Connectivity Centre, a strategy which we believe encapsulates the way our marketplace is developing. Commercially, there is a powerful, complementary fit between the technologies, skill sets, and customer relationships of both companies and the way we both see our customers’ needs evolving.