Synaptics (SYNA) Completes Acquisition of DSP Group, Updates Current Guidance

December 2, 2021 4:21 PM EST
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Synaptics Incorporated (Nasdaq: SYNA) today announced that it has completed the acquisition of DSP Group, a leading global provider of voice processing and wireless chipset solutions, for an aggregate purchase price of approximately $549 million in cash. The acquisition, which was previously announced on August 30, 2021, combines the two companies with leading AI, voice processing, and wireless technologies that collectively enable a variety of smart connected devices.

"We are very excited to welcome the talented DSP Group team to our company," said Michael Hurlston, President and CEO of Synaptics. "DSP Group's capabilities in SmartVoice and low power AI align well with our long-term vision of embedding more intelligence in connected devices at the edge of a network. Further, the addition of DSP Group's ULE wireless technology and VOIP processing solutions enhances our ability to both cross-sell and deliver differentiated solutions to our combined customer base."

Synaptics financed the transaction with the proceeds from a new 7-year $600 million senior secured term loan issued under its existing credit facility, having an initial interest rate of LIBOR + 2.25% and subject to a 25-basis-point margin step-down based on total gross leverage.

Business Outlook UpdateAs previously announced, Synaptics expects the acquisition to be immediately accretive to its non-GAAP EPS. Synaptics is updating its guidance for the second quarter of fiscal 2022 to include DSP Group’s contribution and now expects:

Prior GuidanceUpdated Guidance
Revenue$390M to $420M$410M to $430M
Non-GAAP Gross Margin58.5 percent to 59.5 percent58.5 percent to 59.5 percent*
Non-GAAP Operating Expense$90M to $93M$96M to $98M*
Non-GAAP EPS†$2.90 to $3.20$3.00 to $3.20*

† Estimated 41 million fully diluted shares. * Our prior guidance, on both a GAAP and non-GAAP basis, did not reflect the potential impact of the DSP Group acquisition, which had not been completed as of the date the prior guidance was given. The company has not provided the most directly comparable GAAP measures in its updated guidance and is unable to give a GAAP reconciliation of this guidance because, without unreasonable efforts, we are unable to predict with reasonable certainty the amount or timing of certain charges that are adjusted when calculating the above non-GAAP financial metrics, including without limitation those related to purchase accounting adjustments, restructuring charges, and other charges in connection with the DSP Group acquisition. These adjustments are uncertain, depend on various factors that are beyond our control, and could have a material impact on, in each case, the most directly comparable GAAP financial measure. For a reconciliation of our prior guidance to the most directly comparable GAAP measures, please see the information contained under the headings “Business Outlook” in the press release dated November 4, 2021, posted in the investor relations section of the company’s website at http://investor.synaptics.com.



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