-Cube prepares $1.2B chip spin-off
By Robert Ristelhueber
EE Times
(03/09/00, 11:29 a.m. EST)
MILPITAS, Calif. ? C-Cube Microsystems Inc. filed a registration statement with the Securities and Exchange Commission on Tuesday (March 7) to begin the process of spinning out its chip operations, which will be called C-Cube Semiconductor Inc.
Shareholders of C-Cube Microsystems will receive a share of the new company's stock for each share they currently hold. A total of 47 million shares will be issued, valued at $1.2 billion, according to the prospectus.
Last October, C-Cube Microsystems said it would either sell or spin off its semiconductor operations, following an agreement to be acquired by Harmonic Inc. for $1.7 billion. Harmonic, which makes digital and fiber optic systems that deliver video, voice and data over cable, satellite, telco and wireless networks, will retain C-Cube's Divicom MPEG encoder subsidiary at the time of the spin-off.
Although it considered selling the chip group, C-Cube's board "determined that a spin-off of the semiconductor business was in the stockholder's best interest," the prospectus said. Credit Suisse First Boston was the company's financial advisor in the matter.
The spin-off is expected to take place before the end of March. C-Cube Semiconductor has applied to use the symbol "CUBE" on NASDAQ. C-Cube Microsystems will have no ownership in C-Cube Semiconductor after the distribution, the prospectus said.
The semiconductor company's board will consist of Umesh Padval, president and chief executive officer, Donald Valentine, chairman, and Alex Balkanski, Baryn Futa, Donald McKinney, Gregorio Reyes, and T.J. Rodgers. Padval has been president of C-Cube's semiconductor division since October 1998, while Balkanski was founder and chief executive officer of C-Cube Microsystems.
C-Cube's semiconductor operation designs video encoder and decoder chips for consumer and communications markets, with about two-thirds of its sales taking place in Asia. It has about 600 employees, roughly half of whom work in research and development. The fabless company uses Taiwan Semiconductor Manufacturing Co., United Microelectronics Corp., Matsushita Electronics Corp. and Yamaha as its foundries.
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