NXP Semiconductors will take a majority stake in Trident Microsystems Inc. in a deal that combines Trident with NXP’s business of selling chip sets for televisions and set-top boxes. The two companies said that privately-held NXP will receive a 60% equity stake in Trident. NXP will get newly issued shares along with a purchase of about 6.7 million shares at $4.50 each, resulting in cash proceeds to Trident of $30 million.

In exchange, Trident will acquire and run NXP’s businesses selling chips used in TVs and set-top boxes. Based on the closing price of Trident’s stock, the deal is valued at about $170 million net of cash and inventories. The deal comes as NXP focuses on its business of selling chips known as mixed-signal analog, which are used in a wide variety of industrial and commercial products.

Meanwhile, Trident will expand into the set-top box market, facing off with competitors such as Broadcom and STMicroelectronics. The new business will represent 40% of Trident’s revenue after the deal closes.

Trident, headquartered in Santa Clara, California, designs, develops and markets integrated circuits for digital media applications, such as digital televisions and LCD televisions.

…

Categories: Articles, Business, M&A