NEWPORT BEACH, USA: Conexant Systems Inc. has completed the sale of its broadband media processing (BMP) product lines to NXP Semiconductors. Conexant will receive approximately $110 million in cash and up to $35 million in an “earn-out” fee, contingent upon the achievement of certain milestones through the end of calendar 2009.
The company plans to improve its balance sheet by using the majority of the net proceeds to retire debt.
“The divestiture of our Broadband Media Processing business is consistent with our overall strategy of improving our business model and generating positive cash flow, focusing our investments on the market segments where we either lead or have the opportunity to lead, and establishing a long-term, sustainable capital structure,” said Scott Mercer, Conexant’s chief executive officer. “Our continuing businesses, which consist of Imaging and PC Media and Broadband Access, address a total available market that is more than $3 billion today, and expected to grow at a compound annual rate of 7 percent over the next several years, and we plan to expand our presence in each of the major market segments we serve.
“I’d also like to wish our former employees who have joined NXP Semiconductors the best as they continue working to deliver innovative solutions to set-top box customers around the world,” Mercer said. “Moving forward, I am confident that the combined team will attain even higher levels of success.”
Conexant’s Imaging and PC Media business provides advanced solutions for imaging, video, audio, and modem applications. The company’s Broadband Access business delivers end-to-end system solutions for ADSL, VDSL, and SHDSL applications.
Conexant’s Broadband Media Processing team provided products for satellite, cable, terrestrial, and IPTV set-top box applications. Approximately 700 Conexant employees joined NXP Semiconductors upon completion of the transaction.
Conexant’s worldwide headcount is now approximately 1,350.