Semiconductor company and Apple's communication technology licensing agreement reached
Beijing, China, October 15, 2018-Dialog Semiconductor Corporation (German Stock Exchange trading code: DLG) has announced that it has reached an agreement with Apple to authorize specific power management technology, transfer specific assets and more than 300 employees to Apple supports the latter's chip development. Apple will pay 300 million U.S. dollars in cash for the transaction and prepay 300 million U.S. dollars to order products to be delivered over the next three years. The employees transferred to Apple have been working closely with Apple for many years, and this move will further deepen the cooperation between the two companies.
Dialog also announced that it has won a wide range of new contracts from Apple, including the development and provision of power management, audio subsystems, charging and other mixed-signal ICs. Revenue from the new contract is expected to be realized from 2019 and accelerate in 2020 and 2021.
Dialog plans to accelerate its transformation to become a market-leading provider of differentiated customized and configurable mixed-signal ICs, serving a wider customer base covered by fast-growing businesses in the IoT, mobile, automotive, computing and storage markets. The market targeted by Dialog's power conversion, connection, configurable mixed signal, audio and charging ICs is expected to grow at a compound annual growth rate (CAGR) of 13%, reaching a scale of $13 billion by 2021. Dialog will continue to provide power management ICs (PMICs) to other customers around the world.
Dialog’s CEO Dr. Jalal Bagherli said: “This transaction once again strengthens our long-term relationship with Apple, and also confirms the value of our strong business and excellent technology created by Dialog. Looking ahead, we will have a clearer strategic focus. Relying on our custom and configurable mixed-signal IC technology expertise and world-leading energy-efficient design. Our strong business operation record, deep customer partnerships and excellent talent team provide strong confidence in our future development."
"We believe that this transaction is in the best interests of our employees and shareholders. Our business focus will be clearer and our growth prospects will be stronger. At the same time, the additional financial capabilities brought about by this transaction will also help us invest in our strategic growth plans. Both will benefit our employees and shareholders," Dr. Bagherli added.
Apple will hire more than 300 Dialog engineers and other employees who have been supporting Apple's chip development for a long time. They account for about 16% of Dialog's total employees. Apple will obtain Dialog's specific operating facilities in Livorno, Italy, Swindon, UK, Nabern and Neuaubing, Germany.
Johny Srouji, Apple’s senior vice president of hardware technology, said: “Dialog has deep technical expertise in chip development. This outstanding team of engineers has been supporting our product development for a long time. Now they work directly for Apple. We are very happy. We are very happy. The cooperation with Dialog can be traced back to the earliest iPhone, and we also look forward to continuing long-term cooperation with Dialog."
Dialog's revenue in 2018 will not be affected by this transaction, and the company will continue to deliver products currently in production to Apple. The proceeds from the transaction will further strengthen Dialog's balance sheet strength and help the company accelerate investment (including mergers and acquisitions) in growth opportunities in the IoT, mobile, automotive, computing and storage markets. Dialog intends to initiate a repurchase plan of up to 10% of the outstanding shares after the transaction update in the third quarter.
The transaction with Apple is expected to be completed in the first half of 2019, subject to regulatory approval progress and other customary closing conditions.
Qatalyst Partners acted as Dialog's financial advisor for this transaction, and Linklaters acted as Dialog's legal advisor for this transaction.
Conference call details
Dialog Semiconductor has held a conference call at 08:00 am (London time) / 09:00 am (Frankfurt time) on October 11, 2018 to discuss the transaction.
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