Toumaz is to acquire Frontier Silicon,for up to 32.3m pound,and is raising cash with new shares.
Both are UK fabless chip companies,with Frontier servicing a large share of the global DAB chip market and Toumaz concentrating on wireless medical chips,while supplying some DAB products.
"This acquisition is consistent with our strategy for providing wireless communications across the healthcare,fitness and consumer electronics markets,"said Toumaz CEO Anthony Sethill."The enlarged group can exploit our wireless solutions combined with the software systems,commercial expertise and tier one customer access of Frontier.This acquisition will also enable us to strengthen our commercial presence and provides us with essential engineering and R&D resource."
Toumaz will place conditionally 285.6 million new ordinary shares at a placing price of 10.25 pence,"raising 29.25m pound before expenses,according to Toumaz."The placing shares have been placed at a premium by finnCap with both new and existing institutional investors."
The Frontier price is 27.06m pound in cash,of which2.4m pound will be settled in new ordinary shares,and deferred consideration up to 5.2m pound,dependent on the performance of the enlarged group,in cash and shares.
In March 2009,Toumaz won a design in with DAB radio maker Pure,a firm which had only used Frontier chips until then.
Toumaz had been a medical chip company with wireless capability.What was it doing entering the consumer radio market?
"Our key vision is on the healthcare side and more and more healthcare will be delivered in the home,"Toumaz COO Noel Hurley told Electronics Weekly in November 2010."If we are in consumer,we are already in the home.And there is no better way to understand consumer electronics than to do it.Then we can bring together consumer and healthcare."
