New Capability Strengthens Tundra's System Interconnect Leadership
OTTAWA, June 1 /CNW Telbec/ - Tundra Semiconductor Corporation (TSX:TUN),
the leader in System Interconnect, today announced that it has acquired
Silicon Logic Engineering, Inc. ("SLE") of Eau Claire, Wisconsin for
$14 million USD. SLE is a leader in developing high-performance communications
and computer chip products for some of the world's largest networking and
computing customers. The addition of SLE's highly advanced resources,
expertise and intellectual property (IP) will strengthen Tundra's leadership
in System Interconnect for the communications and computing markets.
Under the terms of the agreement, the purchase price is $14 million USD
comprised of $10 million USD cash and $4.0 million USD (approximately 259,000)
common shares of Tundra. Half of the share consideration will be payable over
the next two years depending on certain operational objectives.
"SLE is clearly a company of unique talent and technical depth and we are
delighted to welcome them to the Tundra team. This acquisition fulfills a key
element of our strategy: by combining SLE's skills with our existing IP and
customer relationships we will expand our product portfolio and broaden the
range of applications we can address. Our customers will benefit because we
will offer more value through our products and services", said Jim Roche,
President and CEO of Tundra. "This also complements our recent acquisition of
Alliance SSBU by adding deep engineering knowledge of computer and
communications systems to help us develop a stronger portfolio of PCI Express
products."
Founded in 1996 and with roots in the supercomputer industry, SLE is a
private company with over forty employees, each with an average of over 15
years of world-class design experience. The company has a successful track
record in all aspects of high performance chip and system design. Since its
inception, SLE has delivered over 35 first-time-right designs.
"We are pleased to be joining forces with Tundra. Their leadership in
delivering world-class standards-based System Interconnect products combined
with SLE's excellent track record of delivering high-performance chips creates
a formidable offering well positioned to respond to the growing System
Interconnect outsourcing trend, " said Jeff West, President of Silicon Logic
Engineering. "Also, the strong alignment of the companies' cultures will
generate a natural synergy. This is a big win for customers and employees."
Jeff West is now Vice President of Design Services at Tundra reporting to
Jim Roche. Mr. West and all other SLE employees will remain at the Eau Claire
facility and SLE will continue to serve its existing and growing customer
base.
In addition to the complementary skill and experience of the SLE team,
Tundra gains valuable IP as a result of the acquisition. SLE is the world's
leading provider of SPI 4.2 cores. SPI 4.2 is a high-speed System Interconnect
standard used by networking and communications companies.
Tundra expects the acquisition to generate revenues through design
services and IP licensing. The SLE business is expected to generate revenues
in the range of $2.0 to $2.3 million per quarter, with gross margins of
between 35% and 40% and profit after tax of between 10% and 12% of revenues.
"Our recent acquisitions demonstrate we are executing against our
strategy. Our objective is to strengthen our financial position, broaden our
System Interconnect portfolio and increase our penetration of strategic
customers. The Potentia Semiconductor acquisition achieves our objectives by
strengthening our financial position. The Alliance SSBU acquisition achieves
all three objectives by giving us a growing and increasingly profitable
revenue stream; products and IP that support PCI Express, PCI and
HyperTransport System Interconnect standards; and increased revenue at key
strategic customers. The SLE acquisition complements our previous acquisitions
by broadening our offering now and in the future and increasing our
penetration of several key strategic customers," commented Roche.
CONFERENCE CALL AND WEBCAST
The Company will be holding a conference call today, June 1, 2006 at
8:30AM EST to review the aforementioned transaction. Investors may access the
conference call via any of the following:
Teleconference: 416-644-3415
Replay: 416-640-1917, Pass code: 21190997 (pound key)
(Available up until June 9, 2006)
Web Cast:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equal sign)1500840
ABOUT TUNDRA
Tundra Semiconductor Corporation (TSX:TUN) is the global leader in System
Interconnect providing world-class support and leading edge semiconductor
solutions to the world's foremost communications, networking, storage system,
and information technology vendors. Consistently delivering on system level
performance promises that reduce time to market, Tundra System Interconnect
ensures market advantage in wireless infrastructure, storage networking,
network access, military, industrial automation, and information technology
applications. For more information, please visit www.tundra.com.
Comment respecting any Forward Looking Statement in this release -
Tundra Semiconductor Corporation is a public company with common shares
listed for trading on the Toronto Stock Exchange (TSX:TUN) in Canada. All
figures, unless otherwise noted, are stated in Canadian dollars in accordance
with accounting principles generally accepted in Canada.
The Company cautions that the forward-looking information in this release
is based on certain assumptions made by the Company that may prove to be
inaccurate. Assumptions made include customer demand for the acquired design
services and IP licensing business, the Company's ability to maintain and
enhance existing customer relationships of the acquired business, as well as
the Company's ability to market its design services to new and existing
customers. Furthermore, the Company cautions that the forward-looking
statements in this release are based on current expectations that are subject
to risks and uncertainties. Actual results may differ due to factors such as
the Company's ability to integrate the acquired business, customer demand for
the acquired design services, changes in customer relationships, new product
and services development, competitive products, pricing pressure, and changes
in the embedded systems market specifically. Additional information
identifying risks and uncertainties is contained in the Company's filings with
the various provincial securities commissions.
TUNDRA is a registered trademark of Tundra Semiconductor Corporation
(Canada, U.S. and U.K.). TUNDRA and the Tundra logo are registered marks of
Tundra Semiconductor Corporation (Canada - registration in the United States,
European Union, and People's Republic of China). Other registered and
unregistered trademarks are the property of their respective owners.
(C) Copyright 2006 Tundra Semiconductor Corporation. All rights reserved.
Information subject to change without notice.
