PALO ALTO, Calif.--(BUSINESS WIRE)--Nov. 10, 2009--
GigOptix, Inc. (OTCBB: GGOX), a leading high speed analog semiconductor
manufacturer specializing in electronic engines for the optically
connected digital world, today announced that the company has signed a
definitive agreement, and completed the acquisition of ChipX,
Incorporated, a privately-held fabless supplier of analog and mixed
signal custom Application Specific Integrated Circuits (ASICs)
on November 9, 2009.
It is anticipated that on a consolidated pro-forma, non-GAAP basis, the
company, with locations in the U.S., Switzerland and Israel, will have
had combined revenues for the first nine months of 2009 of more than
$25M. GigOptix and its subsidiaries will also have a work force of
approximately 95 employees, down from 115 pre-merger, of which around
40% are in research and development, and approximately 15% are in sales
and marketing. As demonstrated in its previous three acquisitions, the
company believes it will achieve significant financial efficiencies
after consolidation. Prior to the acquisition, GigOptix employees
delivered approximately $230K annual revenue per employee, which the
company plans to improve to over $300K annual revenue per employee in
2010.
“I am delighted with the strategic match we have found in ChipX which
continues our vision of bringing complementary technologies together to
increase value for our customers so that we can accelerate our growth
engine and continue to enrich the features we offer while reducing the
cost to our customers,” stated Dr. Avi Katz, Chairman of the Board of
Directors and Chief Executive Officer of GigOptix. “ChipX brings a loyal
portfolio of tier one customers who use the first class design services
and IP of ChipX to create their own truly differentiated custom
products. Similarly, we will bring our own IP together with that of
ChipX to bring new standard products to market faster, and at a lower
investment by leveraging their excellent design capability. This
acquisition fits into our continuous rollup and consolidation growth
strategy and will support continuous improvement of all our financial
and business metrics. I am excited to welcome the new team and look
forward to working together to continue to deliver excellent results for
our shareholders.”
This acquisition is expected to bring a number of benefits to GigOptix’s
current and future customers and investors, including:
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a.
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A solid revenue stream from more than 60 active customers, over 100
custom mixed signal ASIC products in production and 5 products
currently in development.
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b.
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Strong customer relationships due to the level of engagement
required during the joint development of custom ASICs. These are
particularly focused in the vertical markets of Defense & Aerospace,
Industrial, Communications, Medical and Test & Measurement, where
GigOptix can offer complimentary products for cross selling
opportunities.
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c.
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A rich portfolio of intellectual property and complementary skills
that will enable GigOptix to develop new products to expand its
offering to the optically connected market. The alternative of
GigOptix organically developing and building such a rich portfolio
of approximately 70 silicon proven IP cores would take several years
and millions of dollars to achieve.
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d.
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Increased presence in the Defense and Instrumentation market, which
is supported by ChipX’s ITAR certification and the addition of
ChipX’s subsidiary in Haifa, Israel, which is ideally located to
facilitate support expansion of GigOptix’ product sales to the
defense market there and around the world.
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e.
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As a fabless high volume silicon integrated circuit supplier, ChipX
brings strong relationships with leading semiconductor foundries and
sub-contractors and increased purchasing power which may be
leveraged by GigOptix to further improve operating margins and
enhance supply chain accessibility.
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f.
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Continuing the aggressive rollup of entities that have invested
millions of dollars in developing sophisticated technology and
products for a fraction of their investment, to support GigOptix’
cost-effective technology and product arsenal build-up.
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“ChipX is a long time valued supplier to National Instruments and we
look forward to continuing this collaboration with GigOptix," stated
Keith Odom, Research and Development Fellow at National Instruments
(NASDAQ: NATI). "ChipX has a long track record of providing NI flexible,
complex and cost-effective solutions such as mixed-signal ASICs for our
USB 2.0 data acquisition products including NI CompactDAQ and advanced
NI-STC3 PCI Express, timing and synchronization technology for our NI X
Series DAQ devices. The joining of GigOptix and ChipX strengthens and
broadens ChipX’s high-speed analog offering, another critical component
for NI Multifunction DAQ and modular instruments. ChipX was honored with
an NI 2009 Global Supplier Award after demonstrating commitment and
results that set them apart from the rest of the industry and we look
forward to continuing this high standard of innovation with GigOptix.”
With the acquisition, GigOptix brings high volume silicon design
expertise into the company to complement its design excellence in the
more specialist semiconductor technologies of III-V, Silicon germanium
and of course its unique expertise in Electro-Optic (EO) polymer
technology. This will support its strategic move into higher levels of
integration of analog and mixed signal system-on-chip products, such as
Clock Data Recovery (CDR) and Serializer/De-Serializers (SERDES).
Similar to the acquisition of Helix Semiconductors in January 2008, the
acquisition supports GigOptix’s plan to efficiently expand its product
portfolio into high volume optically connected markets such as consumer
electronics, data centers, high performance computing as well as
significantly reducing the time and cost of developing new products,
customer relationships and vertical markets. The transaction also
delivers increased scale with an existing revenue stream from
complementary product sales.
“This is a welcome and exciting move for the ChipX team,” commented
Ophir Nadir, Vice President of Engineering at ChipX. “The combination of
standard products and custom ASICs is an effective model in many
successful semiconductor companies due to the ability to leverage the
valuable customer channel and investment in IP across a larger number of
products. It makes sense to add new intellectual properties to the
custom ASIC tool kit from the GigOptix product base. ChipX has a healthy
pipeline of new customer designs ongoing and expects to see growth in
ASIC sales in 2010. The ChipX team is eager to work with everyone in the
GigOptix corporate family to create additional new growth opportunities
with this synergistic merger.”
While GigOptix has installed an efficient financial operating model,
GigOptix anticipates that the scaled up company will be even better
positioned financially to mitigate the infrastructure cost of being a
publicly traded small cap company. Both companies' headquarters are
located in Silicon Valley, and, to bring organization and financial
benefits, will be quickly consolidated into one location at the current
GigOptix headquarters in Palo Alto, as the current lease of ChipX in
Santa Clara, California, expires in two months. It is expected that
costs synergies will contribute to improving the bottom line as soon as
the first quarter of 2010.
The terms of the deal provide for the ChipX investors to receive
approximately 3.5 million common shares, representing approximately 26%
of the fully diluted share count of GigOptix. As well as the operational
benefits, the acquisition is anticipated to have the significant effect
of broadening the ownership of the GigOptix common stock with the
addition of new strategic and institutional investors. In parallel with
closing the acquisition, the company has entered into a new commercial
banking relationship with Bridge Bank, N.A. (NASDAQ: BBNK), a
full-service professional business bank based in San Jose, California,
which will include a $4 million asset-based line of credit.
Dr. Avi Katz will continue as Chief Executive Officer and Chairman of
the Board. The current GigOptix Management Team will continue to lead
the combined company, and the new ChipX (CX) Product Line will be
jointly managed, ad-interim, by Ophir Nadir, Vice President Engineering
of CX Product Line, and Elie Massabki, Vice President Sales & Marketing
of CX Product Line. Both Mr. Nadir and Mr. Massabki were formerly
executive members of ChipX. The transaction was approved by the board of
directors of both companies and became effective on November 9, 2009.
For more information about the acquisition, GigOptix will be hosting a
webcast and conference call as part of the company’s 3rd
quarter earnings release call, time and date information is as follows:
Conference Call
GigOptix will host a webcast and conference
call on Thursday, November 12, 2009 at 4:30 p.m. Eastern Standard Time
(1:30 p.m. PST).
Conference call and the live audio web cast details:
(Please call
approximately ten minutes prior to the scheduled start of the call)
Toll-free:
800-901-5217
International: 617-786-2964
Pass code: 64899572
Live
Audio web cast and PowerPoint presentation will be available at: www.GigOptix.com.
Telephone replay will be available until November 18, 2009 at 7:30 p.m.
Eastern Standard Time (4:30 p.m. PST)
Toll-free: 888-286-8010
International
callers: 617-801-6888
Pass code: 71084146
Web cast will be
archived on the Company's website with PowerPoint presentation at www.GigOptix.com.
About GigOptix, Inc.
GigOptix, Inc. is a leading fabless supplier of high speed analog
components which enable the continuous expansion of bandwidth needed to
support the ever increasing volume of data being generated in long and
short reach optical networks, datacenters, consumer electronics,
military and avionic communications. GigOptix products include the
electronic engines that drive the optically connected digital world such
as polymer electro-optic modulators, modulator drivers, laser drivers
and TIAs for telecom, datacom, and consumer optical interconnects,
covering serial and parallel communication technologies from 1Gb/s to
120Gb/s. Their ultra-broadband power amplifiers, high speed limiters and
phase delays address the needs of phased array radar, power amplifier
assemblies, satellite communications and test and measurement equipment.
For more information, please visit www.GigOptix.com.
About ChipX, Incorporated
ChipX, Incorporated is a Mixed-Signal ASIC company with the broadest
offering of value-added ASIC solutions, including Standard Cell,
Structured ASIC and Hybrid ASIC technology. ChipX has unique expertise
in PCI Express, USB 2.0, DDR/DDR2 and data conversion mixed-signal
cores; all are silicon proven and certified and they can be integrated
in customers’ ASICs with a record first-time to market success. ChipX
products are widely used in industrial applications, medical equipment
and military/aerospace systems. Headquartered in Santa Clara, CA, ChipX
is a privately held corporation, with a Research and Development
subsidiary in Israel. Investors include Elron
Electronic Industries, Ltd. (NASDAQ: ELRN), Wasserstein
Venture Capital, UMC and Needham Capital Partners.
About Bridge Bank, N.A.
Bridge Bank, N.A. (NASDAQ: BBNK), is Silicon Valley's full-service
professional business bank. The Bank is dedicated to meeting the
financial needs of small, middle-market, and emerging technology
businesses. Bridge Bank provides its clients with a comprehensive
package of business banking solutions delivered through experienced,
professional bankers. Visit Bridge Bank on the web at www.bridgebank.com.
Forward Looking Statements
Statements made in this release, other than statements of historical
fact, are forward-looking statements, including any statement that
refers to expectations, projections or other characterizations of future
events or circumstances and those which can be identified by the use of
forward-looking terminology such as “expects,” “plans,” “may,” “should,”
or “anticipates” and other similar expressions. Forward-looking
statements are subject to a number of known and unknown risks, which
might cause actual results to differ materially from those expressed or
implied by such statements. These risks and uncertainties include the
impact of the ChipX acquisition with respect to increased longevity of
product revenue, reduction in time and costs to develop new products,
the ability to cross-sell to new clients, the success of product sales
in new markets, the amount of cost savings, the improvement on the
bottom line during the first quarter of 2010, the ability to integrate
the team, the new management and the new directors, physical
consolidation into one location, the establishment of the banking
relationship with Bridge Bank, including the accounts receivable credit
line, and those risks and uncertainties described in GigOptix's periodic
reports filed with the SEC, and in news releases and other
communications. GigOptix disclaims any intention or duty to update any
forward-looking statements made in this release.
Source: GigOptix, Inc.
Media:
GigOptix Inc.
Parker Martineau, 650-424-1937 x102
Corporate
Communications Manager
pr@gigoptix.com
or
Investor
Relations:
Alliance Advisors, LLC
Alan Sheinwald, 914-669-0222
President
asheinwald@allianceadvisors.net
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