Cirrus Logic is buying the Edinburgh University spin-out.
Wolfson, a microchip and audio firm spun out from Edinburgh University, is to be acquired by US-based Cirrus Logic in a surprise deal worth £291m – a 75% premium to the Wolfson share price.
Wolfson has partnerships with major technology manufacturers such as Samsung, but has recently struggled as it is trying to develop the next generation of microphones and audio hubs regarded as key components for smartphone and tablet manufacturers. The company recorded a pre-tax loss of $20.3m on annual turnover of $179.4m in 2013, blaming quicker-than-anticipated global take-up of 4G technology for softer-than-expected trading in its 3G markets.
Cirrus Logic is a semiconductor supplier specialising in analog, mixed-signal, and audio digital signal processor integrated circuits. The Texas-based company is fabless – that is, it outsources the fabrication process to so-called semiconductor foundries – has a turnover of $714m with 600 products and over 1,000 patents.
Started in 1984 by David Milne and Jim Reid, the company floated on the London Stock Exchange in 2003 and grew to 420 employees spread across 12 locations in Europe, Asia, Australia and the US.
Cirrus Logic said that, should the deal go ahead (investors accounting for a minimum of 75% of the issued stock of Wolfson must back the sale by the end of June) it would retain a key development base in Edinburgh, but make back-office and duplication savings of around £7m ($11.8m) within a year.
