Chip-maker Conexant Systems is getting out of the digital set-top business.
The Newport Beach, Calif.-based firm signed a definitive agreement worth up to $145 million to sell its Broadband Media Processing product lines, which make chips for satellite, cable, terrestrial and Internet-protocol-TV set-tops, to NXP Semiconductors, the large chip-making business that was spun out of Philips Consumer Electronics in 2006.
Conexant said it is getting out of the set-top business to focus on imaging and PC products.
Under the deal, Conexant will receive $110 million in cash from NXP and up to $35 million in an “earn-out” fee, contingent upon the achievement of certain financial milestones over the next two years. The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close within the next 60 days.
Approximately 700 Conexant employees at locations in the United States, Europe, Israel, the Asia-Pacific region and Japan will transfer to NXP, which had $6.3 billion in revenues in 2007, and join that company’s home business unit.
“Over the years, the Conexant team has successfully developed complex solutions for a variety of set-top-box applications,” Conexant CEO Scott Mercer said in a statement. “NXP has a long history in consumer electronics, and they possess the scale, skill sets, and resources required to maintain and expand the positions we established.”
Conexant shares were up $0.04 each, or 8.9%, in intraday trading Tuesday.