Knowles Completes Acquisition of Audience

Knowles Corporation, the global supplier of advanced micro-acoustic solutions and specialty components, announced the successful completion of its cash and stock tender offer for all the outstanding shares of common stock of Audience, Inc. The offer expired as scheduled at 12:00 midnight (one minute after 11:59 p.m.), Eastern Time, on June 30, 2015. Following the expiration of the offer, Knowles caused the completion of the merger of a wholly owned subsidiary of Knowles with and into Audience, as a result of which Audience became a wholly owned subsidiary of Knowles.

As previously announced, Knowles and Audience signed a definitive merger agreement for Knowles to acquire Audience in a stock and cash merger transaction. Pursuant to the merger agreement, each share of common stock of Audience not accepted for payment in the offer, other than those held by Knowles or Audience or their respective subsidiaries, or holders who properly exercise appraisal rights, was converted into the right to receive $2.51 per share in cash, without interest, and 0.13207 shares of Knowles common stock in the merger contemplated by the merger agreement.

“As we continue on our journey from an acoustic components company to an audio solutions organization, this acquisition expands our ability to deliver intelligent audio solutions,” said Jeffrey Niew, President and CEO of Knowles. “We have complementary products and technologies, which uniquely positions us to optimize the audio signal path to enhance performance and enable new applications. Together we plan to enhance shareholder value by providing our customers with highly differentiated products and technologies.”

Audience will be incorporated into Knowles with the integration expected to be accretive by Q4 of 2016 and generate annual cost synergies of approximately $25 million, primarily from efficiencies in the areas of manufacturing, procurement, logistics and general and administrative functions. As a result of the acquisition, Audience common stock will cease trading on the NASDAQ Stock Market. On June 17, 2015, Knowles had already announced the extension of its tender offer to acquire Audience, in order to facilitate a third quarter closing and to avoid the practical difficulties associated with completing the acquisition prior to the end of the second quarter, in anticipation of a closing on July 1, 2015. On June 10, 2015, Knowles received notification from the Korea Fair Trade Commission concluding that the offer and the merger do not violate the Korean Monopoly Regulation and Fair Trade Act.

Founded in 1946 and headquartered in Itasca, Illinois, Knowles has more than 13,000 employees in 15 countries around the world. Knowles has a leading position in micro-electro-mechanical systems microphones, speakers and receivers which are used in smartphones, tablets and mobile handsets, including Apple’s mobile devices. Knowles is also a leading manufacturer of transducers used in hearing aids and other medical devices and has a strong position in oscillators (timing devices) and capacitor components which enable various types of communication.
According to Knowles, Audience’s acquisition, announced on April 30, 2015, accelerates market penetration and expands available market for intelligent audio solutions. Audience is the current leader in advanced voice and audio processing for mobile devices and the merger with Knowles was considered to allow Audience to pursue its business more effectively, in light of “material declines in forecast demand” since losing Apple as its main customer in 2012 and becoming practically dependent of Samsung for most of its business.

“This transaction offers the potential to transform the mobile audio chain and deliver substantial feature, integration and performance benefits to our customers. We believe that it possesses significant strategic synergies and maximizes value for Audience shareholders,” said Peter Santos, president and CEO, Audience.

The transaction enables Knowles to expand existing expertise in intelligent audio and signal processing solutions through Audience’s strong engineering team and robust patent portfolio. The highly complementary product and technology portfolios will enable Knowles to deliver comprehensive audio solutions to its existing customers.

“Audience and Knowles have pioneered the revolution in connected device audio capabilities,” said Peter Santos. “The combination of the audio and sensory intelligence of Audience and the acoustic expertise and scale of Knowles creates a truly unique audio and sensory systems company.”

In 2015, Audience announced the launch of the N100 multisensory processor, targeted at smartphones, tablets, wearables, and IoT devices, the first to use NUE Multisensory technology, designed to derive intelligence from sensor data available on modern devices. The N100 incorporates Audience VoiceQ and MotionQ technology to enable applications with context awareness, in combination with sophisticated algorithms.

VoiceQ is Audience’s hands-free voice recognition technology that notifies the device to take action when a secure key word is spoken. Using a low-power, Always-On voice activity detector, the N100 continuously listens for voice signals while staying in an ultra-low power mode. The N100 also features the first hardware implementation of the MotionQ 1.0 library – from Audience’s previous acquisition of Sensor Platforms. The NUE MotionQ software is designed to include advanced algorithms, power conscious architecture and outstanding context awareness.
www.audience.com | www.knowles.com