Genesis Microchip to acquire Sage for $241 m

BANGALORE: Genesis Microchip, Inc. is all set to acquire Sage, Inc., for $241
million in stock. The merged company will offer a broad range of products for
the display semiconductor industry worldwide.

According to the merger, Genesis will issue 0.571 shares for each outstanding
Sage share and the former Sage share and option holders will own approximately
28 per cent of the combined company on a fully diluted basis.

Post merger, Genesis, which is a Canada based company headquartered in
Toronto, has plans to shift the merged company's headquarters to North America
still retaining its operations in Canada.

According to Muthukrishnan C, general manager, Sage Design Systems (India)
Pvt. Ltd., Sage has close to 80 per cent of the market share in the digital
display segment worldwide, while 80 per cent of the analog display segment is
held by Genesis.

"This is a merger of two companies addressing two complementary segments
of the display semiconductor industry. It is predominantly a merger into a
single company with expertise in both the technologies which will enable us to
beat the existing competition from big players in this industry," he added.

Genesis has chalked out its key plans following the merger. The company will
now have two primary engineering centers, one in North America and the other in
India.

"Both the development centers will work on digital as well as the analog
technologies," said Muthukrishnan.

The merged company has plans to address the consumer-engineering segment
aggressively. Sage has recently opened its office in China to tap the growing
Chinese television segment.

"China ships around 10-15 million TV sets into the global market and we
wish to tap this opportunity, and as a first move we have set up our
office," said Muthukrishnan. He added that associating with China would
give them a wider coverage of the consumer segment worldwide.

The merged company will retain its employees from Genesis as well as Sage
which totals to about 360 people and has plans to recruit about 20 to 30
engineers for its development center in Bangalore.

"Last year, Sage's turnover was around $36 million and this year we have
a target to achieve $50 million," said Muthukrishnan. He further added that
the merged company is expected to rake in about $250 million for the next year.

The legal formalities are expected to close by February 2002 and the merged
company is likely to continue to be known as Genesis. The name change for its
Indian operations is yet to be finalized.