Synaptics buys Broadcom IoT business for $250m
July 15, 2020
California-based Synaptics is to acquire the wireless IoT business of Broadcom for $250m in an all-cash transaction.
Under the agreement, Synaptics will acquire certain rights to Broadcom’s existing wifi, Bluetooth, GPS and GNSS products and business in the IoT market as well as future roadmap devices designed in process nodes. The co-developed road-mapped products are purpose-built for IoT and will require no additional opex investment.
Around 60 of Broadcom’s engineering support team will transfer to Synaptics.
Synaptics expects the transaction to add about $65m in current annualised sales and provide revenue growth potential. The transaction is expected to be immediately accretive to Synaptics’ non-GAAP gross margins and non-GAAP earnings post-close.
“Expanding our offering in the high growth IoT market has been one of the major focus areas for Synaptics and the addition of best-in-class wireless connectivity technology to our portfolio significantly enhances our overall position,” said Michael Hurlston, president and CEO of Synaptics. “This acquisition complements Synaptics’ ability to sell into a broad range of devices such as IP cameras, smart displays, speakers, home automation and gaming consoles, all of which require cutting-edge technologies including Wifi 6 and 6E, Bluetooth 5.2 and GPS L5.”
The transaction, which has been approved by the board of directors of Synaptics, is expected to close in Synaptics’ first quarter of fiscal year 2021, subject to customary closing conditions. Synaptics expects to finance the transaction from its existing on-hand cash balance and it is not subject to any financing conditions.