Seeking Alpha

Cirrus Logic buying audio chipmaker Wolfson for $467M

  • Cirrus Logic (CRUS) is buying British rival Wolfson Microelectronics (WLFMF) for £2.35/share, or £278M ($467M), in cash. The price represents a 75% premium to Wolfson's Monday close in London
  • Like Cirrus, Wolfson offers audio codec, amplifier, converter, and power management chips. The company also sells MEMS microphones (InvenSense recently entered this growing market), HD audio software (Cirrus thinks it could help differentiate its own products), noise cancellation chips, and several other audio products.
  • Also like Cirrus, Wolfson has had its chips designed into Apple hardware. But with the company nowhere as Apple-dependent as Cirrus, the acquisition represents a fresh attempt to diversify away from its top client.
  • Cirrus expects to close the deal in 2H14, and for it to be accretive in its first full quarter after closing.
  • The acquisition could have implications for voice processor/audio codec developer Audience (ADNC), which competes to an extent against both Cirrus and Wolfson. Cirrus bought voice-processing tech developer Acoustic Technologies last October.
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Comments (4)
  • Van Hyder
    , contributor
    Comments (169) | Send Message
     
    Wonder if Cirrus is considering making a Pfizer-type tax move with this purchase?
    29 Apr 2014, 08:48 AM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1131) | Send Message
     
    That is a nice premium.
    29 Apr 2014, 11:42 AM Reply Like
  • bnkd
    , contributor
    Comments (48) | Send Message
     
    I think any company that can locate off shore and save tax expenditure will
    go for it. Pharma companies have been the leaders. Technology companies that
    have the biggest hoards over seas will follow, use their money to buy up foreign companies. Government policies have kept high corporate taxes. When 1/3rd
    of S&P companies income is generated over seas govt should reduce tax on repatriation of profits generated out side the country and give incentives to corporations to invest funds with in US to generate jobs that would in turn increase tax revenue for the federal and state governments. Another way is to tax
    companies on global income at lower rate.
    29 Apr 2014, 02:13 PM Reply Like
  • berniespear
    , contributor
    Comments (239) | Send Message
     
    guess two years in the penalty box is enough!
    29 Apr 2014, 06:25 PM Reply Like
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