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Parthus merger nears completion
Thursday, September 26 2002
by Matthew Clark


Shareholders in Parthus Technologies, an Irish designer of semiconductors for
mobile devices, have approved the company's pending merger with US-Israeli firm
Ceva.

  





The deal, which has already been approved by Ceva's parent company, DSP Group,
will now be presented to the Irish High Court for approval. Parthus expects the
court to decide on the issue during the third week of October. The company, to be
called ParthusCeva following the merger, said that if the High Court allows the
deal to proceed, the two companies will officially combine on or about 17 October
2002. 





Following that, Parthus shareholders will receive an aggregate capital payment of
around USD60 million. 



One shareholder, Parthus founder Brian Long, who will be the vice-chairman of
ParthusCeva, should rake in around USD11.2 million from the deal. He will own
about 10 percent of the newly combined company. Other Parthus directors and
executives will share approximately USD8.2 million, with USD40.6 million split
among the remainder of the company's owners. 





When combined, ParthusCeva is expected to have revenues of more than USD66
million and an overall valuation of USD500 million.



In London on Thursday, with over 5.5 million shares changing hands, Parthus'
stock was up near the end of trading to STG0.1325, or up around 4 percent on the
day. 



Once the merger is completed, DSP Group shareholders will own just over 50
percent of ParthusCeva. Parthus employees will constitute some 360 of the
400-person workforce of ParthusCeva, and the company will officially be
headquartered in San Jose, California, although Ireland will remain a prominent
base, where the bulk of its management will remain. 



Eli Ayalon, who is currently chairman and chief executive officer of DSP Group,
will become the chairman of ParthusCeva, and Parthus' chief executive officer,
Brian Long, will become the vice-chairman. Parthus' president, Kevin Fielding, is
set to be ParthusCeva's chief executive officer and a board member, while
Parthus' chief financial officer, Elaine Coughlan, will hold the same position in
the new company. 



The company that will be born out of the merger will face what Parthus has said
is a market that demands increased product complexity. Moreover, it's a sector
with shrinking market-windows that have led to growth in the licensing of
complete platform level-IP solutions; but after the merger, ParthusCeva will
theoretically be able to provide these complete products. 



In more general terms, when the two firms are combined, ParthusCeva will be able
to sell DSP core designs, a major component in the construction of mobile phones
and other devices, which have custom-made "system-on-chip" features and
functions, the field in which Parthus is a pioneer. 



Last month, the Irish semiconductor designer said that it intends to stop
investing in Radio Frequency (RF) and hardware-based security acceleration
products and technologies, and as result around 45 jobs were lost in the company.