ISSI to Acquire Chingis Technology Corporation Will add Proven NOR Flash Memory Products for Key Customers
SAN JOSE, Calif., July 19, 2012 /PRNewswire/ -- Integrated Silicon Solution, Inc. (Nasdaq: ISSI) today announced that it has entered into a definitive agreement with the major shareholders of Chingis Technology Corporation ("Chingis") under which ISSI intends to acquire all of the outstanding shares of Chingis pursuant to a cash tender offer valued at $33 million, or $16 million net of the approximately $17 million in cash expected to be on Chingis' balance sheet at closing. The transaction is expected to close in September 2012. Completion of the transaction is conditioned on at least 60% of the Chingis shares being tendered, regulatory approvals in Taiwan and other customary closing conditions. Founded in 1995, Chingis provides a variety of NOR flash memory technologies used in standalone and embedded applications with more than 80 worldwide patents and patents pending. The company has 75 employees in Taiwan, Korea, China and the United States and its stock trades on the Emerging Stock Market in Taiwan (TSE: 3408). For the year ended December 31, 2011, Chingis reported annual revenue of $39.6 million and net income of $2.6 million.
The acquisition of Chingis will strengthen ISSI's specialty memory product portfolio by adding another specialty memory technology to expand the Company's future growth opportunities. The addition of flash memory is expected to meet demand for these solutions from many of ISSI's existing customers. ISSI intends to leverage its existing infrastructure to increase scale and lower Chingis' costs, utilize its foundry relationships to grow Chingis' embedded business and expand the Chingis flash product line based on customers' needs. The companies share a number of distributor and customer relationships particularly in Asia.
Scott Howarth, ISSI's President and CEO, commented, "For our target markets, the NOR flash product line offers many of the same key attributes as our specialty memory portfolio, including stable pricing and gross margins, plus long product life cycles. Our automotive and industrial customers have specifically requested high-quality NOR flash memory products for their long life cycle applications, and, upon completion of the transaction, we will be pleased to be able to offer these solutions. Chingis' products are highly complementary to our existing sales channels due to the unique performance and durability characteristics required by our customers' applications. We look forward to expanding our customer relationships and pursuing additional growth opportunities in this exciting new market."
About the Company
ISSI is a fabless semiconductor company that designs and markets high performance integrated circuits for the following key markets: (i) automotive, (ii) communications, (iii) industrial, medical, and military, and (iv) digital consumer. The Company's primary products are high speed and low power SRAM and low and medium density DRAM. The Company also designs and markets high performance analog and mixed signal integrated circuits. ISSI is headquartered in Silicon Valley with worldwide offices in Taiwan, Japan, Singapore, China, Europe, Hong Kong, India, and Korea. Visit our web site at http://www.issi.com/.
Forward Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning adding proven NOR Flash memory products for key customers, the expected closing date and the expected benefits of the transaction, strengthening ISSI's specialty memory product portfolio, expanding the Company's future growth opportunities, expecting to meet demand for these solutions from many of ISSI's existing customers, intending to leverage existing infrastructure to increase scale and lower costs, utilize foundry relationships to grow Chingis' embedded business and expand the Chingis flash product line, stable pricing and gross margins, long product life cycles, Chingis' products being highly complementary to our existing sales channels, looking forward to expanding our customer relationships and pursuing additional growth opportunities are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties include the ability to satisfy the closing conditions in the acquisition agreement, timing of completion of the transaction, actual demand for Chingis' products from existing or new customers, our ability to sell Chingis' products for key applications and the pricing and gross margins achieved on such sales, our ability to control or reduce Chingis' operating expenses, our ability to maintain the customers, vendors, employees and other relationships of Chingis or other risks listed from time to time in the Company's filings with the Securities and Exchange Commission, including the Company's Form 10-K for the year ended September 30, 2011 and its Form 10-Q for the quarter ended March 31, 2012.
SOURCE Integrated Silicon Solution, Inc.