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RF Micro Devices to Acquire Silicon Wave, Inc., a Leading Provider of Highly Integrated Bluetooth Solutions
RFMD Currently Forecasts Quarterly Bluetooth Revenue Will Increase
Sequentially Throughout Its Current Fiscal Year
GREENSBORO, N.C.—(BUSINESS WIRE)—April 22, 2004—
RF Micro Devices, Inc. (NASDAQ: RFMD), a leading provider of
proprietary radio frequency integrated circuits (RFICs) for wireless
communications applications, today announced it has signed a
definitive agreement to acquire Silicon Wave, Inc., a privately held,
San Diego-based company that is a leading supplier of integrated
circuits for Wireless Personal Area Networks (WPANs).
Silicon Wave's Bluetooth(R) product portfolio includes highly
integrated single-chip CMOS radio processors (including the radio
modem and digital baseband functions), as well as stand-alone CMOS
radio modem solutions. The CMOS Bluetooth radio processors have a
unique architecture that does not require external flash memory nor
external RF components, which represents a cost and size advantage
compared to competitors' solutions. Silicon Wave's Bluetooth products
are currently in production and in use supporting multiple
applications, including cellular handsets, PC peripherals and consumer
electronics devices. Based on existing Bluetooth design activity, RF
Micro Devices currently anticipates quarterly Bluetooth revenue will
increase sequentially throughout its current fiscal year ending March
31, 2005.
Stuart Carlaw, Senior Bluetooth Analyst, IMS Research, said, "With
the acquisition of Silicon Wave, RFMD puts itself in an extremely
strong position to capture growth in the explosive Bluetooth market,
which we anticipate will grow more than six-fold over the next three
years. RFMD is a leader in the cellular PA market with a customer base
that's ripe to leverage for Bluetooth sales. Silicon Wave is an
emerging force in personal area networks with highly integrated
all-CMOS Bluetooth offerings that are gaining traction as stand-alone
products. They're also uniquely architected to provide convergent
multi-protocol wireless solutions leveraging RFMD's silicon-based
product portfolio in complementary wireless connectivity markets.
Given RFMD's leadership position in wireless and Silicon Wave's
pioneering efforts establishing the next-generation, higher data-rate
Bluetooth v1.2 standard, this acquisition presents excellent
opportunities for both companies to combine their competitive
strengths to create shareholder value."
Bob Bruggeworth, president and chief executive officer of RF Micro
Devices, said, "Leading industry analysts, such as IMS Research,
forecast approximately 100 million Bluetooth devices will be shipped
this year. This growth is being driven by the cellular handset market
and related markets, including wireless headsets, printers and PC
peripherals. Through our relationship with Silicon Wave, RFMD has
design wins and is beginning to ramp multiple customers in each of
these target markets. We have developed an excellent working
relationship with Silicon Wave, and we have been impressed by the
depth of their abilities in CMOS circuit design, systems level
integration and product development. During the past year, they have
proven their ability to execute and deliver Bluetooth products, which
are enjoying strong design traction."
David Lyon, president and chief executive officer of Silicon Wave,
said, "The combination of Silicon Wave's highly integrated CMOS
systems-level Bluetooth solutions with RF Micro Devices' customer
relationships, strong supply chain and strategy to deliver increased
functionality to the marketplace make this a great fit for both
companies."
In connection with the acquisition, RFMD will pay approximately
$10.8 million in cash in exchange for all outstanding shares of
Silicon Wave capital stock not owned by RFMD. Additionally, if certain
revenue performance goals for the years ending March 31, 2005 and 2006
are met, RFMD will pay additional amounts in cash to shareholders of
Silicon Wave. Excluding one-time acquisition-related charges, the
impact of the transaction to RFMD's earnings per share is expected to
be dilutive by approximately $0.02 per share in the quarter ending
June 30, 2004, and RFMD forecasts that the transaction should become
neutral to accretive from an earnings standpoint in approximately 12
to 15 months.
The merger transaction is expected to close within 30 days and
will be accounted for under the purchase method of accounting. The
boards of directors of both companies have approved the merger, which
awaits approval by Silicon Wave's shareholders and other customary
closing conditions. RFMD expects to record a one-time charge for
purchased in-process research and development expenses related to the
acquisition in its quarter ending June 30, 2004. The amount of that
charge has not yet been determined.
Silicon Wave will be incorporated into RFMD's wireless
connectivity business unit, which focuses on developing and producing
components and system-on-chip (SoC) solutions for Bluetooth, global
positioning systems (GPS) and wireless local area networks (WLANs).
RF Micro Devices will conduct a conference call at 9:00 a.m. (EDT)
today to discuss the above announcement. The conference call will be
broadcast live over the Internet and can be accessed by any interested
party at the following URL:
http://ir.ccbn.com/ireye/ir_site.zhtml?ticker=RFMD&;script=2100 or by
visiting www.rfmd.com and selecting "Investor Info."
RF Micro Devices, Inc., an ISO 9001- and ISO 14001-certified
manufacturer, designs, develops, manufactures and markets proprietary
RFICs primarily for wireless communications products and applications
such as cellular and PCS phones, base stations, WLANs and cable
television modems. The Company offers a broad array of products -
including amplifiers, mixers, modulators/demodulators, and single-chip
receivers, transmitters and transceivers - representing a substantial
majority of the RFICs required in wireless subscriber equipment. The
Company's goal is to be the premier supplier of low-cost,
high-performance integrated circuits and solutions for applications
that enable wireless connectivity. RF Micro Devices, Inc., is traded
on the Nasdaq National Market under the symbol RFMD. For more
information about RFMD, please visit www.rfmd.com.
This press release contains forward-looking statements that relate
to RF Micro Devices' plans, objectives, estimates and goals. Words
such as "expects," "anticipates," "intends," "plans," "projects,"
"believes" and "estimates," and variations of these words and similar
expressions, identify these forward-looking statements. RF Micro
Devices' business is subject to numerous risks and uncertainties,
including variability in quarterly operating results, the rate of
growth and development of wireless markets, risks associated with the
operation of wafer fabrication, molecular beam epitaxy and test, tape
and reel facilities and the Company's conversion from four-inch to
six-inch wafer manufacturing, its ability to manage rapid growth and
to attract and retain skilled personnel, variability in production
yields, its ability to control and reduce costs and improve gross
margins on highly integrated products, dependence on a limited number
of customers and dependence on third parties. These and other risks
and uncertainties, which are described in more detail in RF Micro
Devices' most recent Annual Report on Form 10-K filed with the
Securities and Exchange Commission, could cause actual results and
developments to be materially different from those expressed or
implied by any of these forward-looking statements.
RF MICRO DEVICES(R) and RFMD(R) trademarks of RFMD, LLC.
BLUETOOTH is a trademark owned by Bluetooth SIG, Inc., U.S.A. and
licensed for use by RF Micro Devices, Inc.
All other product, service and company names are trademarks,
registered trademarks or service marks of their respective owners.
Contact:
RF Micro Devices, Inc.
Dean Priddy or Jerry Neal, 336-664-1233
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