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Semtech To Acquire AptoVision Technologies For Up To $75 Million

Jul. 05, 2017 11:40 AM ETSemtech Corporation (SMTC)


  • Chip maker Semtech has agreed to acquire AptoVision Technologies for up to $75 million in cash consideration.
  • AptoVision has developed audio-visual chipsets and algorithms that reduce the need for proprietary AV matrix switches and enable greater video transport flexibility.
  • The deal, when combined with Semtech's existing video chip expertise, gives the firm a chance to pursue a change in the professional AV market by reducing costs without compromising quality.

Quick Take

Semiconductor technology company Semtech (NASDAQ:SMTC) has announced an agreement to acquire AptoVision Technologies for up to $75 million in upfront and contingent cash consideration.

AptoVision has developed advanced chipsets and related algorithms that reduces video transport cost while offering zero-frame latency, uncompressed 4K streaming capabilities.

Semtech wants to combine its chip development expertise with AptoVision’s technology to accelerate a change away from proprietary AV matrix switches.

Target Company

St. Laurent, Canada-based AptoVision was founded in 2011 to create zero-frame latency video solutions for the professional audio-visual market.

Management is headed by co-founder and CEO Kamran Ahmed, who was previously Director of International Sales at Magenta Research.

Below is a brief demo video about AptoVision’s BlueRiver NT+ system:

(Source: rAVE Publications)

AptoVision has a four-part line of software-defined chipset products:

  • BlueRiver NT+
  • BlueRiver NT
  • BlueRiver 400
  • BlueRiver 200

AptoVision’s products are aimed at the professional, broadcast quality market and the company also provides an API for developers to create their own applications.

Acquisition Terms and Rationale

Semtech is paying $28 million up front cash and up to an additional $47 million in cash based upon the achievement of certain future financial milestones.

As of April 30, 2017, per Semtech’s most recent 10-Q filing, the firm had $281.6 million of cash and equivalents and total liabilities of $377.7 million.

Management said it would pay for the deal with cash on hand so that no additional debt will be incurred in the purchase. The company generated $10.4 million in CFFO (Cash Flow From Operations) in the most recent quarter, so appears to have ample resources to pay for the acquisition.

Semtech described the acquisition’s financial impacts as follows,

Semtech does not expect the acquisition to have any material impact to the financial outlook for its second quarter of fiscal year

This article was written by

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