TI to Acquire Amati Communications for $395 Million; Move
Strengthens TI Position in Emerging $6 Billion Market
PR Newswire - November 19, 1997 08:22
TXN AMTX %CPR %FIN %MLM %TNM V%PRN P%PRN
DALLAS, Nov. 19 /PRNewswire/ -- Texas Instruments (NYSE: TXN) today
announced it has entered into an agreement to acquire Amati Communications
Corporation (Nasdaq: AMTX), further strengthening TI's leadership in providing
digital signal processing solutions for high-speed Internet connectivity. The agreement provides for an all-cash tender offer for all outstanding shares of Amati's common stock at $20 per share, or $395 million.
Amati, located in San Jose, California, is a world leader in digital modem
technology, also known as Digital Subscriber Line (xDSL), which lets ordinary
phone lines transmit data as much as 200 times faster than today's typical
analog voiceband modems. Robust implementation of xDSL makes extensive use of
digital signal processing semiconductor technology, an area where TI is the
world leader.
"We are investing in TI's position in the emerging xDSL segment of the
semiconductor market, which we expect to grow rapidly over the next decade to
more than $6 billion," said Rich Templeton, president of TI's semiconductor
group. "Our vision is to provide digital signal processing solutions across
the spectrum of communications -- from voiceband to broadband."
Digital modems, such as xDSL, will use a digital signal processing
solution at the front and back ends of every connection to the Internet. With
790 million phone lines in use today around the world, that would mean a
market opportunity of more than 1.5 billion sockets, each using a DSP
solution.
"The combination of Amati's xDSL technology and TI's digital signal
processing solutions will enable faster, more reliable access to the Internet
and the ability to use a single, existing phone line to simultaneously access
voice, data and video," Templeton said.
For example, home computer users could use the phone lines already in
their homes to log onto network services, send a fax and play an interactive
game on the Internet -- all at the same time. Software and electronic content
companies could leverage the higher bandwidth to distribute their products
over the Internet instead of delivering floppy disks and CD-ROMs through
traditional retail channels.
"The combination of both companies' leadership technologies enables the
large scale deployment of digital modems, and provides a worldwide reach for
the experience and accomplishments of Amati's employees," said Jim
Steenbergen, president and CEO of Amati Communications.
This acquisition broadens the cooperative relationship that TI and Amati
have had during the last year to build an xDSL chipset using TI's TMS320C6x
core DSP technology and precision mixed-signal components, and Amati's leading
discrete multi-tone (DMT) technology software. This chipset will be the
industry's first fully software-programmable xDSL solution, which will mean
that customers can upgrade their modems through a software download as new
standards become available. Customer samples of this chipset are expected to
be available in the first quarter of 1998.
TI will, subject to satisfaction of certain conditions, commence the
all-cash tender offer on November 25, 1997, and the tender offer is scheduled
to expire at midnight EST, December 23, 1997, unless extended. TI intends to
acquire the Amati common stock through a wholly-owned subsidiary of TI. Any
shares not purchased in the tender offer will be acquired for the tender offer
price in cash in a second-step merger.
The boards of directors of both companies have unanimously approved the
acquisition, and the Amati board of directors has recommended that Amati's
stockholders accept TI's all-cash tender offer. Consummation of the
acquisition is contingent upon the tender of a majority of Amati's outstanding
common stock on a fully diluted basis, the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act and other customary requirements.
Concurrently, TI announced that TI and Westell Technologies, Inc. have
entered into a strategic technology development program that will accelerate
the use of TI's DSP-based xDSL technologies into Westell's DSL systems. These
solutions will incorporate Amati's Discrete Multi-Tone software technology.
This arrangement is contingent on the consummation of TI's acquisition of
Amati.
TI expects to take a one-time charge in the fourth quarter for in-process
research and development. Amati will become a wholly owned subsidiary of TI
reporting into the Semiconductor Group and will continue to operate from its
facilities in San Jose. Amati had fiscal year sales of $13.2 million for 1997
and has approximately 120 employees.
Amati terminated its merger agreement with Westell Technologies to enter
into the definitive agreement with TI for the acquisition of Amati.
Termination of the Westell merger agreement required the payment of a break-up
fee of $14.8 million to Westell.
TI has made a number of strategic investments in recent months in support
of digital signal processing solutions. Acquisitions have included SSi,
Tartan and Intersect Technologies, which brought TI additional expertise in
the areas of hard-disk drives/mass storage and DSP software tools. Recently,
TI announced a $100 million venture fund to seed new markets related to
digital signal processing, and $25 million for additional university research
in DSP. On September 9, TI formally opened a $150 million research and
development center in Dallas that will serve as the technology base for the
ongoing creation of leading-edge digital signal processing solutions.
NOTE:
Texas Instruments Incorporated is a global semiconductor company and the
world's leading designer and supplier of digital signal processing solutions,
the engines driving the digitization of electronics. Headquartered in Dallas,
Texas, the company's businesses also include calculators, productivity
products, controls and sensors, metallurgical materials and digital light
processing technologies. The company has manufacturing or sales operations in
more than 25 countries.
Texas Instruments is traded on the New York Stock Exchange under the
symbol TXN. More information is located on the World Wide Web at
ti.com .
Amati is a pioneer and leading developer of advanced transmission
equipment utilizing DMT technology for the Asymmetric Digital Subscriber Line
(ADSL), Very High-Speed Digital Subscriber Line (VDSL) and xDSL markets.
Amati is the holder of the ADSL/DMT patents and has licensed the technology to
companies such as Alcatel, Analog Devices, Inc., Nortel, Pairgain and
Motorola. The ADSL/DMT technology, recently selected by BC TEL, Canada for a
proposed rollout of commercial ADSL services, is an effective means of
transmitting high-speed data over existing copper phone lines, making internet
access, interactive services, broadcast quality video and video-on-demand
realizable to many subscribers.
More information is located on the World Wide Web at
amati.com .
SOURCE Texas Instruments Incorporated
/CONTACT: Kim Quirk, 972-927-4990, or Leslie Price, 972-995-4961, both
of Texas Instruments Incorporated; or Benjamin Tac Berry of Amati
Communications Corporation, 408-879-2000/
/Web site: ti.com
/Web site: amati.com
(TXN AMTX) |
