Austin-based technology company Silicon Labs is purchasing some assets from California chipmaker Sigma Designs after the two companies failed to complete a merger agreement.
Pending shareholder approval, Silicon Labs will be purchasing Sigma’s “Z-Wave” internet connected devices technology for $240 million, California-based Sigma said.
Z-Wave is a wireless communications protocol used in home automation.
Sigma Designs, based in Fremont, Calif., provides integrated system-on-chip solutions that are used to deliver multimedia entertainment throughout the home.
Sigma in December agreed to be purchased by Silicon Labs for $282 million at $7.05 per share, but the companies said at the time that if the full merger was not approved by shareholders and regulators, they would move forward with the sale of its Z-Wave division.
Sigma Designs did not give specifics on why the merger agreement failed, saying only that closing conditions were not met.
“With the initial closing conditions for the sale of the entire company not met, our definitive agreement with Silicon Labs reverts to the asset sale of the Z-Wave business, which not only enables us to capture the value of the Z-Wave business, it also provides our shareholders certainty of value,” Thinh Tran, CEO of Sigma Designs, said in a written statement.
A Silicon Labs spokesperson said the company would not comment beyond Sigma’s announcement.
After the deal is completed, Sigma said it plans to liquidate other assets, and that it will eliminate about 300 out of 416 positions from its Smart TV and Set-top Box divisions. The company’s stock has tumbled this week on the news of the Z-Wave sale.
Sigma said it expects to close on the deal during its late first or early second fiscal quarter.
Silicon Labs is scheduled to announce its quarterly earnings on Jan. 31.
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