MILPITAS, Calif., June 27, 2007 – LSI Corporation (NYSE: LSI) and Magnum Semiconductor, Inc. announced today that they have entered into a definitive agreement under which Magnum will acquire the LSI consumer products business in a transaction to be funded by private equity investment.
The combination of each company’s consumer products portfolio is expected to allow Magnum to strengthen its position as a leading provider of chips, software and platforms for consumer entertainment systems. The sale of the consumer products business will enable LSI to focus its investments on its core businesses in the storage, networking and mobility market segments. The transaction is expected to close in the third quarter and is not subject to regulatory approval. Financial terms are not being disclosed.
Jack Guedj, president and CEO of Magnum Semiconductor, said, “By taking this step we bring in people, talent and products that will accelerate our revenue ramp and our R&D efforts. Magnum now becomes one of the industry leaders in audio/video chips and software for the consumer electronics market. We also gain access to the market for professional broadcast solutions that deliver content to consumers.”
With this transaction, Magnum Semiconductor strengthens the company’s existing DVD, digital TV and digital entertainment center solutions while also adding MPEG-2 and H.264 high-definition media processing and low-power 3D graphics products to its portfolio. “Combining Magnum Semiconductor and the LSI consumer products business enhances and expands the products and services we offer to consumer electronics manufacturers worldwide,” Guedj said.
Abhi Talwalkar, LSI president and CEO, said, “After exploring a full range of strategic options, we have determined that the best opportunity for the long term success of our consumer products business is an external one. The combination of both company’s strong product portfolio, together with strong backing from top-tier private equity firms and a solid technical and management team will position Magnum to achieve scale and success in the consumer electronics market.”
The definitive agreement is the result of an ongoing strategic review within LSI of its business portfolio following its merger with Agere Systems on April 2, 2007.
Under the terms of the agreement, Magnum will purchase the LSI DoMiNo®, Domino[X]™ and Zevio™ architectures, products and related IP of the LSI consumer products business. Additionally, Magnum will offer employment to a significant number of LSI employees associated with the business. The two companies will also work together to seamlessly transition the business to continue to offer customers the highest quality products, services and support.