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SigmaTel Secures Intellectual Property and Adds Renowned Design Team from D&M Holdings Inc.
Acquisition Strengthens SigmaTel IP; Addition of Respected Rio(R)
Technology Design Team Increases SigmaTel's Hard Drive System
Expertise and Expands Global Reach
AUSTIN, Texas—(BUSINESS WIRE)—July 26, 2005—
SigmaTel, Inc. (NASDAQ:SGTL), a global leader in analog intensive,
mixed-signal integrated circuits for the portable consumer electronics
and computing markets, has agreed to acquire the software, patents and
engineering resources associated with the Rio(R) portable audio
product line. The cash acquisition from D&M Holdings Inc. (TSE
II:6735), also joins Rio's Cambridge, England-based design team with
SigmaTel's existing designers. This acquisition broadens and
strengthens SigmaTel's already impressive intellectual property (IP)
base, particularly in the expanding hard disk drive (HDD) MP3 player
market segment. The acquisition does not include any rights to
ownership of the portable audio player products, inventory or
trademarks associated with the Rio brand.
The Cambridge design team's intellectual property (IP) and
execution have resulted in highly regarded hard drive designs based on
SigmaTel's 3500 family of audio system on chip (SoC) solutions. These
cost-effective hard drive designs, which have recently been augmented
with Microsoft(R) PlaysForSure capability, will now be available to
SigmaTel's general customer base. Additionally, the Cambridge team's
work developing ARM-based hard drive players has produced significant
IP relating to one of the industry's most-used CPU designs, which will
be leveraged in the design team's focus on SigmaTel's new 3600 product
family.
"The addition of the Cambridge team and its IP, combined with our
team in Austin, Texas, will provide us with the software resources to
support both the 3500 and 3600 product lines in flash and hard drive
implementations," said SigmaTel's President and CEO, Ron Edgerton.
"Not only will SigmaTel be able to more rapidly meet the needs of our
large and growing customer base in the flash and hard drive digital
audio market, but we will also be able to accelerate the development
of our multimedia solutions."
Through the acquisition, SigmaTel gains as many as 15 patents and
patent applications, some of which are among the earliest MP3 player
patents ever granted and many of which have been granted or are
pending in Europe and Asia. The design team, currently comprised of
software and hardware engineers in Cambridge and Santa Clara, CA, was
responsible for developing the technology of the Forge, Carbon and
ARM-based Karma MP3 players. The team will remain principally in the
United Kingdom, which further increases SigmaTel's capability to serve
the European market, adding to the company's existing points of
presence in the United States, China, Singapore, Taiwan, Japan and
Korea.
"This acquisition demonstrates SigmaTel's commitment to
continuously extending our position as the industry leader in
developing innovative technologies for the benefit of our customers
and the end consumer," Edgerton said. "By providing solutions that
enable companies to develop devices with the longest battery life,
smallest form factors and lowest system design costs, SigmaTel has
built a customer list that includes some of the most popular makers of
MP3 player devices around the world. With the Cambridge design team in
place, we're taking the necessary steps to make sure we maintain our
market leading position and competitive advantage across market
segments."
In connection with the acquisition, SigmaTel will pay an
undisclosed sum of cash consideration for certain assets of D&M
Holdings, Inc. A portion of the consideration will be subject to
escrow pursuant to the terms of the acquisition agreement. The parties
intend to close the acquisition in a very short time. SigmaTel may
record a one-time charge for purchased in-process research and
development expenses related to the acquisition in its third quarter,
ending September 30, 2005. The amount of that charge, if any, has not
yet been determined.
For more information on SigmaTel, please visit the SigmaTel
website at www.sigmatel.com.
SigmaTel will discuss some specifics about this acquisition in its
Second Quarter 2005 earnings conference call to be held today, July
26, 2005, beginning at 4:00 P.M. Central Time. This call will be
simulcast via SigmaTel's website at
www.sigmatel.com/investor.relations. Replays of the call will be
available at this web address and via telephone at 800-633-8284 (U.S.)
and 402-977-9140 (international) by entering reservation number
21250066. These replays will be available through August 26, 2005.
About D&M Holdings Inc.:
D&M Holdings Inc. (TSE II:6735) is based in Tokyo and owns the
Denon, Marantz, McIntosh Laboratory, D&M Professional, ReplayTV(R),
Rio(R) and Escient(R) brands. Denon, Marantz, McIntosh and D&M
Professional are global industry leaders in the specialist home
theater, audio/video consumer electronics or professional audio
markets, with a strong and long-standing heritage of manufacturing and
marketing high-performance audio and video components. The ReplayTV,
Rio and Escient brands represent award-winning technologies in digital
home entertainment. Additional information is available at
www.dm-holdings.com.
About SigmaTel:
SigmaTel, Inc., a fabless semiconductor company headquartered in
Austin, Texas, designs, develops, and markets proprietary, analog
intensive, mixed-signal ICs for a variety of products in the consumer
electronics and computing markets, including portable compressed audio
players, such as MP3 players, notebook and desktop PCs, DVD players,
digital televisions, and set-top boxes. SigmaTel provides complete,
system-level solutions that include highly-integrated ICs,
customizable firmware and software, software development tools,
reference designs, and applications support. The Company's focus is on
providing system-level solutions that enable customers to rapidly
introduce and offer electronic products that are small, light-weight,
power-efficient, reliable, and cost-effective. SigmaTel is ISO
9001:2000 certified and is committed to providing customers with high
performance, quality products along with superior customer service.
Cautionary Language:
This press release contains forward-looking statements based on
current SigmaTel expectations. The words "expect," "will," "should,"
"would," "anticipate," "project," "outlook," "believe," "intend," and
similar phrases as they relate to SigmaTel or future events are
intended to identify such forward-looking statements. These
forward-looking statements reflect the current views and assumptions
of SigmaTel, but are subject to various risks and uncertainties that
could cause actual results to differ materially from expectations. A
number of important factors could cause actual results to differ
materially from those in the forward-looking statements, and there
will be events in the future that SigmaTel is not able to accurately
predict or control. For a discussion of factors that could impact
SigmaTel's financial results and cause actual results to differ
materially from those in the forward-looking statements, please refer
to recent SigmaTel filings with the SEC, particularly the Form 10-K
that was filed on February 8, 2005 and the Form 10-Q that was filed on
April 19, 2005.
SigmaTel is a registered trademark of SigmaTel, Inc. All other
products and brand names as they appear in this release are trademarks
or registered trademarks of their respective holders. All
specifications may be changed without notice.
Contact:
SigmaTel, Inc., Austin
Press Contact:
Rebecca Gonzales, 512-381-3922
Email Contact
or
Investor Contact:
Debbie Laudermilk, 512-381-3931
Email Contact
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