Dialog to Acquire Adesto Technologies to Broaden Presence in Industrial IoT (IIoT) Market

February 20, 2020 Tiera Oliver

Dialog Semiconductor and Adesto Technologies Corporation announced they have signed a definitive agreement for Dialog to acquire all outstanding shares of Adesto.

Adesto accelerates Dialog’s expansion into the growing IIoT market that enables smart buildings and industrial automation (Industry4.0), driving cloud connectivity. Adesto an established portfolio of industrial solutions for smart building automation that fully complements Dialog’s manufacturing automation products. Adesto’s solutions are sold across the industrial, consumer, medical, and communications markets.

Benefits of Transaction

Bringing Dialog and Adesto together creates a complementary product portfolio for servicing a broad customer base in growth segments of the industrial market and enables cross-selling.

The combination:

•Scales Dialog’s IIoT sector capabilities by combining industrial connectivity, smart metering and building automation solutions, and access to more than 5,000 customers, the majority of which are new for Dialog.

•Complements Adesto’s industrial wired connectivity portfolio with Dialog’s wireless portfolio (BLE, Wi-Fi) for smart building and industrial applications. Cloud-connectivity adds further differentiation to Dialog’s existing Industrial solutions. 

•Enables full system solutions for wearables, hearables, and other IoT applications by combining Adesto’s low-power specialty memory products with Dialog’s BLE & Wi-Fi connectivity and True Wireless Stereo (TWS) Audio ICs.

•Unlocks future growth in the Automotive market by qualifying Adesto’s specialty memory products by leveraging Dialog’s established Automotive production and test flow. Additionally, these products address the emerging, fast-growing Artificial Intelligence (AI) segment.

•Adds engineering and design scale to expand Dialog’s existing custom IC business making Dialog one of the largest custom analog mixed-signal semiconductor providers.

Transaction Structure and Terms

Dialog will acquire Adesto for $12.55 per share in cash, or for approximately $500 million enterprise value. The deal will be funded from Dialog’s balance sheet.

The transaction is expected to be EPS accretive 1 for Dialog within the first calendar year following close. Dialog expects annual cost synergies of approximately $20 million within the first calendar year of close across the combined company. Dialog also anticipates considerable additional revenue synergies given the complementary nature of the product portfolios and technology. Adesto expects to report FY 2019 revenue of approximately $118 million and continued revenue growth is anticipated over the next few years.

The transaction is subject to certain regulatory approvals and customary closing conditions and is expected to close in the third quarter of 2020.

The Board of Directors of Adesto has unanimously approved the transaction and recommends that Adesto stockholders vote in favor of the transaction, and directors and executive officers of Adesto have agreed to vote their shares in favor of the transaction.

Hogan Lovells is serving as Dialog’s legal counsel, while BMO Capital Markets is serving as financial advisor. Fenwick & West LLP is serving as legal counsel for Adesto, with Cowen & Company, LLC serving as financial advisor.

Conference Call Information:

Dialog will host a conference call on Thursday, February 20 at 10:00 a.m. CET/ 9:00 a.m. UK. A link to the webcast is available at https://webcast.openbriefing.com/dialog-feb2020/.

Participants can pre-register at www.incommuk.com/customers/dialogsemiconductor call to receive access details via email. Additionally, conference call information is below.

Germany (Local): 0322 2109 8334

United Kingdom: 0800 640 6441

United Kingdom (Local): 020 3936 2999

United States: 1 855 979 6654

United States (Local): 1 646 664 1960

All other locations: +44 20 3936 2999

Access code: 863503 (Participants will be greeted by an operator who will register their details.)

About the Author

Tiera Oliver, edtorial intern for Embedded Computing Design, is responsible for web content edits as well as newsletter updates. She also assists in news content as far as constructing and editing stories. Before interning for ECD, Tiera had recently graduated from Northern Arizona University where she received her B.A. in journalism and political science and worked as a news reporter for the university's student led newspaper, The Lumberjack.

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