Silicon Labs to Acquire Z-Wave Technology for $282 Million

Silicon Labs has confirmed the acquisition of Sigma Designs and its Z-Wave business and technology for approximately USD 282 million, subject to certain closing conditions. Sharing a common vision of a secure, interoperable connected home, both companies now intend to work together to drive the road map and adoption of Z-Wave technology.

Sigma Designs provides solutions for the connected home including Z-Wave, a leading Internet of Things (IoT) technology for smart home solutions. Z-Wave supplies some of the world's largest ecosystems of smart home IoT products with more than 2,100 certified, interoperable devices available from more than 600 manufacturers. Its addition will expand Silicon Labs' wireless connectivity portfolio and worldwide customer base for the connected home.

The connected home represents one of the largest market opportunities in the IoT space. Today, there is no single dominant wireless technology for home automation, and protocols include Wi-Fi, Bluetooth, Zigbee, Thread and proprietary. By adding Z-Wave technology to its connectivity portfolio, Silicon Labs’ hopes to be better positioned to serve this fast-growing market. It intends to provide ecosystem providers and developers with a one-stop shop for wireless connectivity solutions for the home.

The addition of Z-Wave extends connectivity options for developers and ecosystem providers and delivers alternatives to customers and markets for secure, interoperable IoT devices. Silicon Labs intends to work in collaboration with the Z-Wave Alliance to drive adoption and development of Z-Wave technology.

In addition to Z-Wave technology, Sigma Designs also provides solutions for Media Connectivity and Smart TV. It is now also planning to divest or wind down its Smart TV business. In addition, Sigma Designs is in active discussions with prospective buyers to divest its Media Connectivity business. Subsequent to divestiture and restructuring actions, Silicon Labs expects the acquisition of Sigma Designs to be accretive on a non-GAAP basis.

In the event that certain closing conditions are not met, the parties have agreed that Sigma Designs would instead sell its Z-Wave business to Silicon Labs for $240 million, contingent upon approval by Sigma Designs' stockholders. The boards of directors of both companies have approved the transaction. Silicon Labs expects the transaction to close in the first calendar quarter of 2018. Morgan Stanley & Co. is serving as financial advisor to Silicon Labs, and Deutsche Bank is serving as financial advisor to Sigma Designs.