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

    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.”

“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.”

LUTZ POROMBKA | CEO
Creative Chips

Team Members

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With a background as M&A banker at J.P. Morgan and a senior private equity professional at mid-market firm Monitor Clipper Partners, Oliver has been exposed for over 20 years to a wide variety of transaction situations with European mid-cap and large cap companies, with a particular focus on software and financial services.

Oliver´s experience is very broad-based: he advised on M&A transactions and equity & debt raises, served on the board of portfolio companies, took operational CFO roles and restructured balance sheets. He also founded and ran his own software company, for which he raised close to EUR 10m. This 360° view allows him to understand everybody´s point of view and priorities when talking to shareholders, management teams and investors, and facilitates finding creative solutions and optimal transaction structures.

Oliver has a Diplôme d´Ingènieur from the Ecole Polytechnique in Paris and a diploma in international relations from Johns Hopkins SAIS in Bologna. He has lived in France, Germany, Austria, the UK and the US, and speaks mother tongue level German and French, as well as decent Italian and Spanish. He currently serves on the board of Reverse Logistics Group in Munich.

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