Wednesday, July 9, 2008

TranSwitch to Acquire Centillium for Optical Access, VoIP ICs

TranSwitch agreed to acquire Centillium Communications in a deal valued at about $42.8 million.

TranSwitch is a provider of carrier-class semiconductor solutions for EoS (Ethernet over SONET/SDH), Broadband Access and Carrier Ethernet applications. TranSwitch said the acquisition broadens its portfolio especially for FTTH and VoIP solutions.

Centillium is a System-on-Chip (SoC) provider offering PON solutions for optical access network and VoIP ICs capable of carrying up to 1,000 VoIP channels on a single chip.

Under the deal, TranSwitch will issue an aggregate of 25 million shares of common stock and $15 million, which will be allocated pro rata among holders of Centillium common stock and vested, in-the-money, stock options outstanding at the closing of the merger. Based on Centillium's capitalization as of July 9, 2009, Centillium shareholders would receive 0.5958 shares of TranSwitch common stock and $0.36 in cash for each share of Centillium common stock. Based on TranSwitch's closing share price on July 9, 2008, the total consideration values Centillium at $42.8 million or approximately $1.02 per share on a fully-diluted basis. Centillium shareholders will own approximately 16% of the combined company.

TranSwitch said it has identified approximately $10.5 million of annual expense savings and expects the transaction to be accretive to earnings in the first full quarter after closing and significantly accretive in 2009.http://www.transwitch.com

  • In February 2008, Ikanos Communications acquired Centillium's DSL technology and assets in an all-cash transaction valued at approximately $12 million.