Analog Devices Inc. said it has struck a deal to sell its MEMs microphone division to California-based Invensense Inc., a supplier of motion tracking components and solutions for the consumer electronics market that is aggressively expand offerings in the market segment.
Invensense will pay $100 million in cash to Analog Devices and assume some undisclosed liabilities for the unit. The total cost of the transaction could increase over the next year based on other terms, including other financial payments contingent upon the performance of the MEMS microphone business.
The deal offers Invensense significant design reference intellectual properties as well as turnkey products and support facilities in the United States, Europe and China. With the purchase, which is expected to close this month, Invensense said it expects to accelerate its product development for the consumer electronics market, areas where the company has been deepening its offerings in recent years. The transaction also comes with up to 40 key employees and a tier-one customer currently engaged with Analog Devices, according to a statement published Invensense.
"With this acquisition, we are excited to welcome an exceptionally experienced team into InvenSense that will enable us to significantly scale our audio product portfolio, accelerate our time to market, and achieve long-term growth in the broader sensor SoC market,” said Behrooz Abdi, president CEO of InvenSense in the statement. “Audio is fast becoming complementary to motion as a means for interacting with contextually aware devices and applications, with an increasing attach rate of 2-3 microphones per high-end phone."
Analog Devices said it decided to sell the MEMS microphone division in continuation of plans to focus more on its core businesses. The MEMS unit is expected to account for less than one percent of Analog Devices’ sales for the current fiscal year that ends Nov. 2, the company said in a statement. Analysts on average forecast the company will report revenue of approximately $688 million for the quarter.
“This agreement will allow ADI to focus on combining precision sensing technology and signal processing systems expertise to deliver the highest value to customers in our highest priority markets while driving sustainable growth and profitability for ADI,” said Mark Martin, vice president of ADI’s sensor products and technology group in the statement. “The impact of high performance inertial sensing innovation is increasing across automotive, industrial, and healthcare applications and we are focusing our resources accordingly.”