Seeking to strengthen its presence in the Industrial Internet of Things, Dialog Semiconductor plc has agreed to acquire Adesto Technologies Corporation, a supplier of custom integrated circuits (ICs) and embedded systems for the Industrial Internet of Things (IIoT) market. Dialog will acquire Adesto for $12.55 per share in cash, for approximately $500 million enterprise value.
The deal will accelerate Dialog’s expansion into the growing IIoT market that enables smart buildings and industrial automation (Industry 4.0), seamlessly driving cloud connectivity. Adesto, headquartered in Santa Clara, California, has approximately 270 employees and an established portfolio of industrial solutions for smart building automation that complements Dialog’s manufacturing automation products.
For Dialog, this is the second IIoT-related acquisition since last October, when the semiconductor supplier acquired Creative Chips GmbH in a cash deal worth $80 million.
“This acquisition substantially enhances our position in the Industrial IoT market,” said Jalal Bagherli, CEO of Dialog. “Adesto’s established strength in connectivity solutions and highly optimized products for building and industrial automation perfectly complements and adds scale to our Industrial IoT portfolio from the recently acquired Creative Chips. Adesto’s deep customer relationships, comprehensive system expertise, and proprietary technology will deliver enhanced value for Dialog customers.”
The deal merges 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.
In addition, the companies are expected to provide 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.
The deal will also add engineering and design scale to expand Dialog’s existing custom IC business, making Dialog one of the largest custom analog mixed-signal semiconductor providers
Dialog expects annual cost synergies of approximately $20 million within the first calendar year across the combined company. 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 expected to close in the third quarter of 2020.