Oct. 5, 2009 (PR Newswire) --
SANTA CLARA, Calif. and EINDHOVEN, The Netherlands, Oct. 5 /PRNewswire-FirstCall/ -- Trident Microsystems, Inc. (Nasdaq: TRID) and NXP Semiconductors today announced that they have signed a definitive agreement whereby Trident will acquire NXP's television systems and set-top box business lines. Trident would remain fabless with a significant presence in Asia and as a result of the transaction would have a global leadership position in the digital home entertainment market. Under the terms of the transaction, NXP will receive newly issued shares of Trident common stock equal to 60% of the total shares outstanding post-closing, including approximately 6.7 million shares that NXP will purchase at a price of $4.50 per share, resulting in cash proceeds to Trident of $30 million.
"As the fragmented consumer IC market continues to consolidate, the ability to leverage IP across multiple segments is becoming increasingly important due to the R&D investments necessary to deliver leading-edge innovation," said Sylvia Summers, President and CEO of Trident. "Through this transaction, Trident will become one of the leading global suppliers with the product portfolio, IP and operational infrastructure required to effectively serve the large, high-growth digital home entertainment market."
Including revenue from the acquired product lines, Trident would have estimated revenue of approximately $500 million in calendar 2009, with approximately 60% attributable to television and 40% to set-top box. Upon closing, Trident will have an extensive portfolio of consumer IP applicable to a range of markets, with over 2,000 granted and in-process patents including motion estimation/motion compensation and conditional access, as well as advanced 45nm SoC technology. The combined product portfolio will enable Trident to offer a broad range of semiconductor solutions to the digital home market, which Trident estimates will reach $5 billion by 2010.
"Success in the consumer business requires a company culture based on rapid decision making, a fast pace of innovation, and a highly competitive cost structure," stated Summers. "This proposed transaction enables Trident to achieve the economies of scale required to compete in the digital home market, while also taking advantage of our start-up culture and cost-efficient Asia-based engineering and operations. As a result, Trident will be well positioned to address a larger market, accelerate our time to breakeven and achieve our long-term financial objectives."
In order to drive cost-efficient innovation that is competitive with the industry's most aggressive consumer IC suppliers, Trident expects to retain a core set of technology centers of excellence in Europe and North America, while growing and leveraging the substantial engineering presence that each of NXP's Home business unit and Trident already has in Asia. Following the close of the transaction, Trident intends to continue supporting the existing customers and design wins of each company. In addition, Trident plans to develop a converged product roadmap, leveraging the substantial IP of both companies and cost structure of Trident to provide the competitive products required for the next generation of customer designs.
"We believe the consumer IC business is a large, high-growth opportunity, best served by a company dedicated to this market with a highly efficient operating infrastructure," said Rick Clemmer, President and CEO of NXP. "This proposed combination is the ideal structure to position the considerable technology and market assets of our digital TV and set-top box lines for growth and financial success.
