Maxim To Buy Teridian For $315 Million

SAN JOSE, Calif. -- Moving into a new and emerging market, Maxim Integrated Products Inc. has entered into a definitive agreement to acquire Teridian Semiconductor Corp. for approximately $315 million in cash. The acquisition positions Maxim (Sunnyvale, Calif.) in the smart meter chip market. Teridian is a fabless semiconductor company headquartered in Irvine, Calif. It is a chip supplier to three of the top four major meter manufacturers in the U.S. and to over 50 meter manufacturers globally. In 2005, private equity firm Golden Gate Capital, in partnership with the semiconductor management team of TDK, acquired the Irvine, Calif.-based company from TDK-USA, a subsidiary of the Japan-based TDK Corp., for an undisclosed amount. The mixed-signal semiconductor supplier, TDK Semiconductor Corp., changed its name to Teridian Semiconductor at the time. Maxim will build on Teridian's market position to accelerate sales of Maxim's existing power management, real-time clock, and interface products, as well as security IP, which are all required in smart meters. Smart meter units using both system-on-a-chip (SoC_ and multi-chip solutions are estimated to grow 10 percent annually through 2014. Maxim projects its serviceable available market (SAM) for the energy measurement portion of smart meters to reach $380 million by 2014. Beside smart meters, Maxim and others are seeing strong demand in analog. There are still select shortages and extended lead times in the analog arena. And demand looks strong--at least until the third quarter. ''Recent checks on Maxim suggest 1Q revenues are tracking toward the high end of its guidance range of $500-$520 million (up 6-to-10 percent QOQ) and two points above Street estimates,'' according to a recent report from FBR. ''For 2Q, Maxim could guide revenues to $520-$540 million (up 0-to-4 percent sequentially), slight upside versus the Street estimate of $528 million. Maxim has been on a buying spree as well. In 2008, Maxim entered into a definitive agreement to acquire Mobilygen Inc., a developer of H.264 video compression chips. In January of 2009, Maxim acquired Innova Card (La Ciotat, France), fabless semiconductor company specializing in the design and development of secure solutions for terminals, for an undisclosed sum. Also in 2009, Maxim acquired Zilog Inc.'s secure transaction product line. This features the Zatara 32-bit, ARM-based microcontroller family for use in payment terminals. Last last year, analog chip maker Maxim has sold some RFID intellectual-property (IP) to Intelleflex Corp. In return, Maxim received an equity position in Intelleflex (Santa Clara, Calif.), a developer of RFID products. In total, seven engineers from Maxim will be joining Intelleflex.