TI buys Burr-Brown for $7.6 b.

Texas Instruments (TI) has announced that it has agreed to pay $7.6 billion for

Burr-Brown, a manufacturer of data converter and amplifier analog

semiconductors.

"What this does is, it positions TI from being No. 5 in data converters

to where we become No. 2," said TI’s chief operating officer Rich

Templeton. The takeover is an all-stock transaction in which Burr-Brown

shareholders receive a healthy 56 per cent premium over the current value of

their stock.

Burr-Brown CEO Syrus Madavi said the two companies make a good fit.

Burr-Brown’s integrated circuits and other products are used in personal

computers, medical instruments, industrial controls and communications devices.

"We have a common view of the market and complementary skills."

Data converters change analog signals such as sound to digital form and then

back to analog. Burr-Brown also makes data amplifiers that amplify, for example,

a cell phone's signal and converts it into the digital date that can be

processed by the device's Digital Signal Processor (DSP). Burr-Brown’s

high-end converters and amplifiers are used in phones, personal computers,

medical instruments and other devices. The Semiconductor Industry Association

estimates that sales of analog devices will grow 25 per cent this year to $22

billion.

Texas Instruments chief financial officer William Aylesworth said Burr-Brown

and other recent acquisitions of analog-technology companies will complement TI’s

leadership in digital signal processor chips. "Every time a device like a

cell phone uses a DSP to process data, it also needs analog chips to convert

analog to digital and back and to amplify the signal. These are areas where

Burr-Brown is a clear leader."

Burr-Brown employs some 1,500 people at facilities in Tucson (Arizona),

Scotland and Japan. The company earned $45.7 million on sales of $291.5 million

last year. The Burr-Brown acquisition follows two other analog-related deals TI

has made in the past year, including Unitrode, a maker of chips that extend a

cell phone's battery life. TI acquired the company last October for $1.25

billion. And in November, it bought Power Trends for about $145 million in

stock. Power Trends makes chips that monitor a phone's power consumption.