Cirrus Logic has agreed to acquire Scotland’s Wolfson Microelectronics for $467 million in a deal that will create an audio chip giant.
The deal signals ongoing consolidation in the hardware markets as companies combine to achieve critical mass. Both companies are big players in portable audio applications such as smartphones, tablets, PCs, and automotive entertainment. The deal is aimed at strengthening Cirrus Logic’s customer base and broadening its offering of audio chips. Its holdings include SoundClear, which isolates the background noise in a cell phone call and deletes it from a conversation so that all you can hear is the caller’s voice.
Austin, Texas-based Cirrus Logic had $714 million in revenues in its last fiscal year. The company makes analog and mixed-signal converters and processors that are used in a wide range of equipment. The company previously acquired Acoustic Technologies, a voice processing software maker.
Cirrus is paying £2.35 (about $4) per share for the company, giving it an enterprise value of $467 million. The deal is expected to close in the second half of the year. Both companies expect to have $12 million in annual cost savings altogether within a year after the deal closes.
Cirrus Logic has 751 employees while Wolfson, based in Edinburgh, has 437. Both companies were founded in 1984.