Acuity advises Creative Chips GmbH on their strategic sale to Dialog Semiconductor plc

has been acquired by Type: Divestiture

New acquisition establishes Dialog as a mixed-signal semiconductor supplier into the fast-growing Industrial Internet of Things (IIoT) market

Dialog Semiconductor plc (XETRA:DLG), a leading provider of power management, charging, AC/DC power conversion, Wi-Fi and Bluetooth® low energy technology, today announced it has signed a definitive agreement to acquire Creative Chips GmbH, a prominent supplier of Integrated Circuits (ICs) to the Industrial Internet of Things (IIoT) market.

Headquartered in Bingen close to Frankfurt, Germany, with an additional design center in Dresden, Creative Chips is a fabless semiconductor company with a growing IC business supplying a broad portfolio of industrial Ethernet and other mixed-signal products to top-tier, blue-chip manufacturers of industrial and building automation systems. The technology is optimised to efficiently connect large numbers of IIoT sensors to industrial networks. Building on its long-established custom IC business, Creative Chips is also developing a range of highly complementary standard IO-Link IC products, driving broader connectivity in the Industry 4.0 revolution.

The new acquisition is strategic for Dialog to establish itself as a proven supplier, well-positioned to capture the significant growth potential of the Industrial IoT market. It also provides Dialog with a rich portfolio of core IC products and a broad library of relevant analog, digital and RF technologies. The acquisition includes the addition of an experienced engineering team with a wealth of unique skills that, when combined with Dialog’s worldwide engineering, marketing and sales teams, will accelerate IC sales on a global basis.

Both companies operate well-established fabless semiconductor business models with a focus on mixed-signal products and technology. With Dialog’s global scale, operations, product development and extensive IC technology resources, the combined companies are strongly positioned to quickly address opportunities in the IIoT market.

“The acquisition of Creative Chips is instrumental for Dialog, giving it a strong foothold in the Industrial IoT market, while still highly complementary to Dialog’s current mixed-signal business,” said Jalal Bagherli, CEO of Dialog. “The addition of Creative Chips and its team of highly experienced and talented engineers will help to further diversify Dialog’s product revenues, customer base and end markets by extending our reach in the industrial sector. We look forward to welcoming the whole team to Dialog.”

With Creative Chips, Dialog gains an impressive set of top-tier industrial customers with trusted relationships that have been built over the course of nearly 20 years. This will extend Dialog’s global sales reach of its existing wireless low power connectivity, configurable mixed-signal and power management ICs while establishing a key strategic building block for Dialog to realise its larger ambitions in the Industry 4.0 market.

Creative Chips is expected to generate revenues of approximately $20 million in 2019 with revenue growth of over 25% per annum anticipated over the next few years. The acquisition will be funded from Dialog’s balance sheet for a cash payment of approximately $80 million, with an additional contingent consideration of up to $23 million, based on future revenue targets in 2020 and 2021.

The transaction is expected to close in the fourth quarter of 2019.

Lutz Porombka, CEO of Creative Chips, commented:

“Acuity has deep semiconductor sector expertise which was evident throughout the transaction. From the outset, Acuity understood our business and was able to relay this in a compelling way to an array of international buyers. In particular, I was extremely impressed with their ability to access the right senior people within large semiconductor companies. As a team we had no prior exposure to M&A, and we found Acuity´s support as they guided us through the process, invaluable. I can see why they have earnt their reputation as the most active European advisor in the sector and I would have no hesitation in recommending Oliver and his team.”

Matthew Byatt, Managing Partner at Acuity said:

“I am thrilled that Acuity Advisors has been involved in the sale of Creative Chips to Dialog Semiconductor. This transaction highlights once again the strength of our international semiconductor sector practice and is an excellent result. We have known Dialog for many years and they will make the perfect partner for the Creative Chips team and their portfolio of mixed-signal and digital ASIC and ASSP products.”

Oliver Markl, Managing Partner at Acuity said:

“It was a pleasure working with the Creative Chips team on their exit to Dialog. Creative Chips is a highly differentiated business which has built up an enviable reputation over the past 20 years. This reputation is founded on a broad semiconductor product portfolio, a high quality customer base and unique engineering expertise in analog mixed signal design. All of this together makes Creative Chips a great addition to Dialog.”

Oliver Markl, Partner, Acuity

About Acuity Advisors LLP

We know technology – that’s why we’re the industry’s trusted M&A advisor. Our partners are senior players in tech and M&A: skilled at getting to the heart of a technology business, understanding what will attract buyers, and building long-lasting relationships. We have an unrivalled understanding of the industry’s complexities and personalities – our track record and client feedback are compelling evidence of that. We’re an international firm – most of our deals are cross-border, from offices in London, Munich, Shanghai and Silicon Valley – but we’re grounded in our approach. We move quickly when it’s needed, and we’re around for the long haul when patience is a virtue. We’ve maintained a very high success rate across hundreds of deals while keeping our focus on doing what’s right for our clients. From first meeting to successful exit, we earn the trust that clients and investors put in us. Read more…

© 2019 Acuity Advisors LLP

quote Acuity has deep semiconductor sector expertise which was evident throughout the transaction. From the outset, Acuity understood our business and was able to relay this in a compelling way to an array of international buyers. In particular, I was extremely impressed with their ability to access the right senior people within large semiconductor companies. As a team we had no prior exposure to M&A, and we found Acuity´s support as they guided us through the process, invaluable. I can see why they have earnt their reputation as the most active European advisor in the sector and I would have no hesitation in recommending Oliver and his team. quote
Lutz Porombka, CEO Creative Chips

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