DSP Group (DSPG) is one of the most dynamic global providers of voice and wireless chipset solutions for communications. DSPG recently acquired the Straubing research facility from Harman Becker Automotive Systems, and in June 2020 announced the acquisition of SoundChip SA, a leading supplier of active noise cancellation (ANC) technology, and production-line test systems for headphones and headsets. Like Synaptics, DSP Group is also headquartered in San Jose, California, and was originally founded in Herzliya, Israel, where it still is located.
The acquisition announcement states that the combination DSP Group is anticipated to generate annual run rate synergies of $30 million for the new entity to be realized within 12 months of closing. The transaction is expected to be financed through a combination of cash on hand and a fully committed, incremental debt financing arrangement with a projected close by the end of calendar year 2021, subject to DSP Group shareholder approval and customary closing conditions.
DSP Group has leadership positions across multiple markets in the connected audio devices, with significant growth opportunities in low power SmartVoice, unified communications & collaboration, and wireless IoT devices. Most of these solutions are quite relevant to Synaptics' existing customer base, furthering the strategy of cross-selling portfolio devices.
Synaptics recently announced its Low Power Edge AI initiative, which opens a significant long-term strategic opportunity. The addition of DSP Group's SmartVoice products to Synaptics' Katana smart vision platform creates a complete portfolio that can both serve existing customer needs and address the significant future market. In addition, the combination further strengthens Synaptics' industry-leading wireless connectivity portfolio by adding DECT Ultra Low Energy (ULE), which enables a fully-featured intelligent home security solution.
"We continue to invest in technologies that tilt our product mix toward IoT applications," says Michael Hurlston, President and CEO of Synaptics. "DSP Group's expertise in SmartVoice and ULE wireless solutions, coupled with Synaptics' leadership position in far-field speech recognition and IoT directed Wi-Fi/BT combos enables us to deliver increasingly differentiated solutions to our combined customer base, while positioning us to lead the transition to AI enabled devices at the edge of the network."
"We are excited to join forces with Synaptics, a recognized leader in products for IoT. This combination provides a great result for our shareholders who have supported us through this journey, delivering meaningful and certain value," adds Ofer Elyakim, CEO of DSP Group. "Our complementary portfolios together with the combination of our world-class engineering teams creates an exciting opportunity for DSP Group's core technology to extend further into our existing customers' product portfolio."
“The DSP Group board of directors unanimously supports this transaction as it represents an excellent outcome for our shareholders," commented Ken Traub, Chairman of the Board of Directors, DSP Group. “We would like to thank DSP Group’s management and employees for their dedication to executing our strategy and congratulate them on this exciting achievement."
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