Data

Adesto Technologies (NASDAQ:IOTS), a leading provider of innovative application specific semiconductors for IoT era announced a definitive agreement to acquire Echelon for $8.50 per share. The company said that the acquisition price represents a total equity value of approximately $45 million and total value of about $30 million. As quoted in the press release: “With …

Adesto Technologies (NASDAQ:IOTS), a leading provider of innovative application specific semiconductors for IoT era announced a definitive agreement to acquire Echelon for $8.50 per share.

The company said that the acquisition price represents a total equity value of approximately $45 million and total value of about $30 million.

As quoted in the press release:

“With the acquisition of Echelon, we are continuing to advance toward our vision of becoming a significant player in semiconductor and communication systems for IoT markets, in particular industrial IoT,” said Narbeh Derhacobian, CEO of Adesto. “Adesto started out providing application specific non-volatile memories for IoT, and we’ve continued to expand our memory portfolio with a wide range of differentiated devices. Through S3 Semiconductors, we added strong mixed-signal and RF ASIC capabilities. Following the acquisition of Echelon, we will be able to provide not only semiconductors, but also powerful software and deep systems and solutions expertise for industrial systems and enterprise automation, with a loyal customer base. We’re excited about the potential this acquisition presents as Adesto enters its next phase of growth.”

The transaction is subject to customary closing conditions, including approval by Echelon’s stockholders. Adesto expects the transaction to close in the third calendar quarter of 2018, after which time Echelon will become a business unit within Adesto.

Adesto expects to finance the transaction through a combination of existing cash and equity and/or debt. Adesto today issued a separate announcement regarding its financing plans.

Benefits to Adesto of completing the transaction include:

  • Increases revenue and accelerates margin expansion opportunities
  • Expected to be accretive to EBITDA and non-GAAP earnings within the first 12 months
  • Significantly increases Served Available Market (SAM)
  • Enhances technology assets and capabilities to include broad range of semiconductors, software and systems solutions for Industrial IoT (IIoT)

Canaccord Genuity is serving as financial advisor to Adesto, and Fenwick and West LLP is serving as legal counsel to Adesto. Piper Jaffray & Co is serving as financial advisor to Echelon and Wilson Sonsini Goodrich & Rosati, Professional Corporation is serving as legal counsel to Echelon.

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