Divestment of the Sound Solutions business marks a key step in NXP’s strategy to improve its capital structure and focus on High Performance Mixed Signal business growth
Eindhoven, The Netherlands, December 22, 2010 – NXP Semiconductors (Nasdaq: NXPI) and Dover Corporation (NYSE: DOV) today announced that they have signed a definitive agreement whereby Dover’s affiliate Knowles Electronics will acquire NXP’s Sound Solutions business, the leading provider of speaker and receiver components for the mobile handset market. The sale of the Sound Solutions business, which for reporting purposes is included in NXP’s Standard Products segment, will significantly strengthen NXP’s balance sheet while allowing the company to further focus its resources on its core High Performance Mixed Signal business. Under the terms of the agreement, Knowles will acquire Sound Solutions for $855 million in cash. In conjunction with the transaction, NXP and Knowles have agreed to the terms of a strategic relationship whereby NXP will become Knowles’ exclusive source for certain High Performance Mixed Signal semiconductors. The transaction is expected to close in the first quarter of 2011.
Knowles is part of the Electronic Technologies segment of Dover and is the world’s largest manufacturer of high performance transducers used for hearing aids and other high quality acoustic applications. The Itasca, Illinois-based company also designs, manufactures and assembles MEMS microphones for personal mobile device and communications markets. The combination of Sound Solutions’ speaker and receiver business for mobile phones with Knowles’ solutions in the hearing aid component and MEMS microphones markets creates a true leader in the micro-acoustics industry.
“Combining the operations of Sound Solutions and Knowles represents another major milestone in our strategy of focusing on High Performance Mixed Signal markets, and it will help to further improve our capital structure,” said Rick Clemmer, President and CEO, NXP Semiconductors. “The micro-acoustic components market offers significant growth potential, which can be best achieved through a focused company, dedicated to this market and with a complete suite of complementary products required for a leadership position. We look forward to participating in that growth as a strategic supplier to Knowles going forward.”
The revenue of the Sound Solutions business was approximately $255 million in the first three quarters of 2010. About 1,000 Sound Solutions employees, who are currently based in Sound Solutions’ headquarters in Vienna, Austria, and its facilities located in Beijing, China, will join Knowles. Existing Sound Solutions customers will continue to be supported under the combined company.
Separately, NXP and Technicolor (NYSE: TCH, Euronext: TCH) announced that Nutune, a joint venture formed in June 2008 to combine NXP’s and Technicolor’s can tuner module operations, has been sold to affiliates of AIAC (American Industrial Acquisition Corporation). Nutune, headquartered in Singapore, has 2,950 employees worldwide, including 2,800 manufacturing employees in Batam, Indonesia. The revenue of Nutune was approximately $79 million in the first three quarters of 2010. Details of the acquisition were not disclosed.
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