On October 8th, Dialog Semiconductor announced that it has signed a definitive agreement to acquire Creative Chips GmbH, an outstanding integrated circuit (IC) supplier for the industrial IoT market.
Creative Chips is a fabless semiconductor company with a growing IC business offering a broad portfolio of industrial Ethernet and other mixed-signal products to leading industrial and building automation system manufacturers. Headquartered in Bingen, near Frankfurt, Germany, and a design center in Dresden. Its technology is optimized for efficient connection of large numbers of IIoT sensors to industrial networks. Building on its custom IC business, Creative Chips is also developing a series of highly complementary standard IO-Link IC products that will support a wider range of connections in the Industry 4.0 revolution.
The new acquisition is a strategic move by Dialog to become an industrial IoT provider, providing an opportunity to capture the significant growth potential of the industrial IoT market. It also brings a wealth of core IC products and a wide range of analog, digital and RF related technologies to Dialog. The acquisition will also bring a team of engineers with extensive experience and unique skills to Dialog, combined with Dialog's global engineering, marketing and sales teams, to help accelerate Dialog's global IC sales.
Both companies use a fabless semiconductor business model with a primary focus on mixed-signal products and technologies. Relying on Dialog's global scale, operations, product development and extensive IC technology resources, the combination of the two companies will occupy a favorable position to quickly gain market opportunities in the IIoT market.
Jalal Bagherli, CEO of Dialog Semiconductor, said: "The acquisition of Creative Chips has greatly helped Dialog, enabling us to have an important position in the industrial IoT market, while also providing a high complement to Dialog's existing mixed-signal business. The addition of Creative Chips and its experienced and talented team of engineers will help Dialog further diversify its product revenue, customer base and end market. It not only strengthens our automotive application product line, but also expands our presence in the industrial sector. Business. We look forward to welcoming the entire team of Creative Chips to Dialog."
With the addition of Creative Chips, Dialog has acquired a series of top industrial customers, and these mutual trust and customer relationships have been established for nearly 20 years. This will expand Dialog's existing wireless low-power connectivity products, configurable mixed-signal ICs (CMICs) and power management ICs worldwide, while laying the key strategic cornerstone for Dialog to achieve greater goals in the Industry 4.0 market.
Creative Chips' revenue in 2019 is expected to reach approximately $20 million and will achieve an annual growth rate of over 25% in the coming years. Dialog will pay $80 million for the acquisition in cash, and the acquisition will be funded by Dialog's performance statement. In addition, based on the 2020 and 2021 revenue targets, Dialog will pay an additional $23 million in additional funding, depending on the situation.
This acquisition is expected to be completed in the fourth quarter of 2019.