Product category:
Communications ICs (Wired)
News Release from: Intersil
Edited by the Electronicstalk Editorial
Team on 22 July 2003
Intersil to quit wireless LAN market
Intersil has entered into a definitive agreement to sell its Wireless Networking Product Group to GlobespanVirata.
Intersil has entered into a definitive agreement to sell its Wireless Networking Product Group to GlobespanVirata The sale price is approximately $365 million and will be paid in cash and stock
This article was originally published on Electronicstalk on 8 Jan 2001 at 8.00am (UK)
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Intersil expects to finalise the sale before the end of the third quarter of 2003 and expects to report a one-time gain on the transaction.
"Intersil has been instrumental in creating the wireless local area networking (WLAN) market and our team has done an outstanding job over the past five years making us the acknowledged industry leader under our Prism brand", said Rich Beyer, President and CEO of Intersil.
"As the 802.11 WLAN market continues its strong growth, this technology is increasingly becoming an integral part of the communications, computer and consumer landscape.
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The challenges of this WLAN evolution are resulting in even greater differences in the business models of Intersil's High Performance Analogue Product Groups and its Wireless Networking Product Group.
We have made a strategic decision to focus our technology and resources entirely on our leadership positions in high performance analogue.
As WLAN technology continues to migrate into new applications from broadband modems to cell phones, we believe the required capabilities to address this trend fit perfectly with the strategy and competencies of GlobespanVirata".
"GlobespanVirata has established itself as the leading provider of integrated circuits, software and system designs for broadband communications applications.
They are as highly respected for their success in the broadband communications market as Intersil's Wireless Networking Product Group is in the WLAN market", Beyer continued.
"Selling our Wireless Networking Product Group to GlobespanVirata will help keep Prism the leading 802.11 brand and better serve the WLAN market and our customers.
We want to assure all of our customers that there will be no change in our relationship during the transition.
Our current wireless team will continue to provide the high level of quality and service that customers have come to expect with Intersil and our Prism products".
The sale will include Intersil's portfolio of Prism-based wireless networking products and intellectual property, as well as the design, marketing, sales, applications teams and support operations.
The Wireless Networking Product Group comprises around 300 employees.
In the first quarter of 2003, the Wireless Networking Product Group reported revenue of approximately $49 million.
Transition teams, including employees from both companies, will work to ensure as seamless a transition as possible for Intersil's wireless networking customers during the sale.
Under terms of the agreement, Intersil will receive $250 million in cash and approximately $115 million in GlobespanVirata stock.
Intersil will also retain the accounts receivable and the accounts payable of the Wireless Networking Product Group.
This will result in approximately $20 million of additional cash to be collected by the company after the transaction is completed.
"This transaction completes our transition to a pure high performance analogue company.
We're very excited about the opportunity to focus the strategy of Intersil entirely on analogue, and we will continue to refine this strategy by expanding our portfolio into attractive new applications.
Our analogue businesses have leadership positions and significant market share in several of the most exciting growth segments of the technology sector, and have consistently outperformed the industry for the past several years.
This success is continuing in 2003.
During the first half of this year, our analogue business grew in excess of 10% compared to the first half of 2002, and is approaching a $500 million annual revenue run rate", added Beyer.
"Intersil is the world's leader in high performance analogue technology in regulating power for desktop computing and managing laser light for CD read/write drives.
Over the past year, the company has diversified further into leadership positions in emerging markets including notebook and handheld computing, battery management and recordable DVD drives.
Intersil recently announced the world's first Blu-ray laser diode driver for the next generation of recordable digital data following DVD.
Intersil is a technology leader in high performance analogue - combining our unique design, process technologies and customer applications support into complex solutions for our leading global customers.
For our shareholders, this results in a company with significant growth potential in both revenue and earnings", concluded Beyer.
Intersil completed its second quarter on 4th July 2003.
On a preliminary basis, the company expects to report adjusted revenue above the high end of its original guidance, with three of its four product groups growing more than 10% from the previous quarter.
Adjusted earnings per share are expected to reach the high end of the range provided by the company in April.
Further details will be provided when Intersil reports its second quarter results on 23rd July 2003.
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