Proving the Business Case for the Internet of Things

Silicon Labs buys Bluegiga for $61m to attack IoT market

Steve Rogerson
February 11, 2015
 
Texas based semiconductor company Silicon Labs has paid $61m to acquire Bluegiga Technologies, a privately held company based in Espoo, Finland, and one of the fastest growing independent providers of short-range wireless connectivity and software for the IoT.
 
Bluegiga’s wireless portfolio includes low-power Bluetooth Smart, Bluetooth Classic and Wifi modules, as well as software stacks, development tools and software development kits for applications in the industrial automation, consumer electronics, audio, automotive, retail, residential, and health and fitness markets.
 
This acquisition significantly expands Silicon Labs’ wireless hardware and software for the IoT. Bluegiga’s Bluetooth and Wifi modules, software stacks and development tools complement Silicon Labs’ 802.15.4 Zigbee and Thread mesh networking software, low-power sub-GHz products, and wireless MCU and transceiver devices. The combined wireless connectivity portfolio and development ecosystem should let Silicon Labs address a broader range of market opportunities and customer needs. Together, the two companies hope to provide a one-stop-shop source of standards-based wireless connectivity including high-performance, long-range and ultra-low-power options.
 
“With Silicon Labs’ wireless, microcontroller and sensor portfolios gaining considerable traction in the IoT markets, the timing of this acquisition couldn’t be better,” said Tyson Tuttle, CEO of Silicon Labs. “Bluegiga’s wireless modules and software stacks round out our wireless portfolio and complement our IoT solutions. The addition of Bluegiga wireless modules gives us new ways to deliver simplicity to our customers, enabling developers to easily add wireless connectivity to their designs.”
 
Following the acquisition, Silicon Labs will continue to operate in Espoo, Finland, as a centre of excellence for wireless hardware and software technology development. The company will continue to develop, market and support a complete portfolio of Bluetooth and Wifi module products and software stacks for customers worldwide.
 
“The Bluegiga team is excited to join forces with Silicon Labs,” said Riku Mettälä, vice president of product creation at Bluegiga. “We truly share a common vision of enabling versatile, cost-effective and streamlined wireless connectivity for a wide range of applications, from the connected home to industrial IoT to consumer and health and fitness devices. Together, our wireless development teams will drive innovation in the IoT market, and our unified solutions will give customers a rich choice of wireless platforms for connected devices.”
 
Under the agreement, Bluegiga investors received approximately $61m in cash. The acquisition was funded from Silicon Labs’ balance sheet cash resources and required no borrowing. Bluegiga is expected to contribute about $25m to $28m in revenue in 2015, and Silicon Labs expects the acquisition to be accretive to 2015 non-GAAP earnings.
 
Mooreland Partners acted as the sole financial advisor to Bluegiga on its sale to Silicon Labs.
 
"The Bluegiga transaction confirms that IoT continues to be a highly strategic area," said Peter Globokar, managing director in Mooreland's European office. Charlie Bullock, managing director in Mooreland's Silicon Valley office, added: "This is also an important transaction that sees a leading semiconductor vendor invest in the IoT module arena."