Zoran Merges with CSR

CSR plc, a British Company specializing in wireless technology has entered into a merger agreement with Israeli chip Company Zoran Corp., under which Zoran will merge with CSR (News - Alert) for a value equivalent to $679 million.

The merged company is believed to offer differentiated, integrated technology to address the rapidly growing market for connected, location-aware multimedia devices including handsets, digital cameras and home entertainment equipment.

Managed by founder Levy Gerzberg, Zoran's share price reportedly closed at $9.32 on Wall Street on February 18^th, 2011, giving it a market cap of $460.9 million, so that the acquisition price represents a 47.3 percent premium.

Following the merger, Zoran's shareholders will receive 35 percent of the merged company. For each Zoran share, the shareholders will receive 1.85 shares in CSR.

In a press release Joep van Beurden, chief executive officer at CSR said, "Digital electronic devices are becoming increasingly connected and full of media-rich features, including the ability to stream images from your camera to your PC or video conferencing from your Smartphone. Zoran's market leading imaging and video capabilities, combined with our own connectivity and location capabilities, make this a great opportunity for us. The same is true in the home entertainment space where wireless connectivity is increasingly being adopted in a range of consumer devices such as digital TVs Zoran's image technology combined with our connectivity skills will provide a differentiated proposition which will be appealing for our customers."

“We expect the merger to enhance the merged company’s financial strength and to create new and wider revenue opportunities that neither party could pursue on its own. Combined with the Share Buyback we expect the transaction to be strongly double digit accretive in 2012,” Beurden added.

As a supplier of wireless connectivity and location chips, CSR has been selling Bluetooth, GPS, FM, Wi-Fi and audio devices. It employs about 1,500 people, and posted an operating profit of $376.6 million in the fourth quarter, on revenue of $80.6 million.

Zoran provides imaging and video chips for digital camera, home entertainment and multifunction printer products. It employs about 1,550 people, and posted an operating profit of $186.1 million in 2010, on revenue of $357.3 million.


Jai C.S. is a contributing editor for TMCnet. To read more of Jai's articles, please visit his columnist page.

Edited by Jennifer Russell