Dialog to Acquire Adesto Technologies to Broaden Presence in Industrial IoT (IIoT) Market
February 20, 2020
Adds differentiated cloud-connected solutions driving Industry 4.0 adoption.
Dialog Semiconductor and Adesto Technologies Corporation announced they have signed a definitive agreement for Dialog to acquire all outstanding shares of Adesto.
Adesto accelerates Dialog’s expansion into the growing IIoT market that enables smart buildings and industrial automation (Industry4.0), driving cloud connectivity. Adesto an established portfolio of industrial solutions for smart building automation that fully complements Dialog’s manufacturing automation products. Adesto’s solutions are sold across the industrial, consumer, medical, and communications markets.
Benefits of Transaction
Bringing Dialog and Adesto together creates a complementary product portfolio for servicing a broad customer base in growth segments of the industrial market and enables cross-selling.
•Scales Dialog’s IIoT sector capabilities by combining industrial connectivity, smart metering and building automation solutions, and access to more than 5,000 customers, the majority of which are new for Dialog.
•Complements Adesto’s industrial wired connectivity portfolio with Dialog’s wireless portfolio (BLE, Wi-Fi) for smart building and industrial applications. Cloud-connectivity adds further differentiation to Dialog’s existing Industrial solutions.
•Enables full system solutions for wearables, hearables, and other IoT applications by combining Adesto’s low-power specialty memory products with Dialog’s BLE & Wi-Fi connectivity and True Wireless Stereo (TWS) Audio ICs.
•Unlocks future growth in the Automotive market by qualifying Adesto’s specialty memory products by leveraging Dialog’s established Automotive production and test flow. Additionally, these products address the emerging, fast-growing Artificial Intelligence (AI) segment.
•Adds engineering and design scale to expand Dialog’s existing custom IC business making Dialog one of the largest custom analog mixed-signal semiconductor providers.
Transaction Structure and Terms
Dialog will acquire Adesto for $12.55 per share in cash, or for approximately $500 million enterprise value. The deal will be funded from Dialog’s balance sheet.
The transaction is expected to be EPS accretive 1 for Dialog within the first calendar year following close. Dialog expects annual cost synergies of approximately $20 million within the first calendar year of close across the combined company. Dialog also anticipates considerable additional revenue synergies given the complementary nature of the product portfolios and technology. Adesto expects to report FY 2019 revenue of approximately $118 million and continued revenue growth is anticipated over the next few years.
The transaction is subject to certain regulatory approvals and customary closing conditions and is expected to close in the third quarter of 2020.
The Board of Directors of Adesto has unanimously approved the transaction and recommends that Adesto stockholders vote in favor of the transaction, and directors and executive officers of Adesto have agreed to vote their shares in favor of the transaction.
Hogan Lovells is serving as Dialog’s legal counsel, while BMO Capital Markets is serving as financial advisor. Fenwick & West LLP is serving as legal counsel for Adesto, with Cowen & Company, LLC serving as financial advisor.
Conference Call Information:
Dialog will host a conference call on Thursday, February 20 at 10:00 a.m. CET/ 9:00 a.m. UK. A link to the webcast is available at https://webcast.openbriefing.com/dialog-feb2020/.
Participants can pre-register at www.incommuk.com/customers/dialogsemiconductor call to receive access details via email. Additionally, conference call information is below.
Germany (Local): 0322 2109 8334
United Kingdom: 0800 640 6441
United Kingdom (Local): 020 3936 2999
United States: 1 855 979 6654
United States (Local): 1 646 664 1960
All other locations: +44 20 3936 2999
Access code: 863503 (Participants will be greeted by an operator who will register their details.)