Chip Maker Atmel Buys Newport Media for IoT Gear

The Internet of Things (IoT) market is getting more M&A activity seemingly every day. Touchscreen chip manufacturer Atmel (ATML) said earlier this week that it has paid $140 million in cash for Newport Media, a $43 million maker of low-power Wi-Fi and Bluetooth solutions.

Atmel said the deal, which expands the San Jose, California-based processor manufacturer’s wireless portfolio of smart connected devices, positions it for immediate, near-term growth in the IoT market and makes it a stronger player. The $140 million purchase price is subject to working capital adjustments and includes an additional earn-out payment of up to $30 million based on reaching certain revenue bars in the next two years, officials said. Atmel said it will fund the purchase with cash on hand and borrowed capital.

The companies said they expect the transaction, which is subject to customary closing requirements, will finalize sometime in calendar Q3 2014.

Atmel’s purchase of Newport Media is well-timed. Atmel is a member in the newly formed Open Interconnect Consortium (OIC), along with founders Dell, Intel (INTC) and Samsung. The association, which also includes Broadcom and Wind River, seeks to establish standards for smart devices to work together and talk to one another in the emerging IoT.

Newport Media’s 802.11n Wi-Fi and Bluetooth certified products will be folded into Atmel’s SmartConnect wireless portfolio. Officials said the combined Newport Media lineup with Atmel’s low-power microcontrollers will suit a wide range of applications, including industrial, home and building automation, as well as consumer products requiring smaller form factors and longer battery life.

"This acquisition immediately adds 802.11n Wi-Fi and Bluetooth to our offerings and will accelerate our introduction of low-energy Bluetooth products," said Steve Laub, Atmel president and chief executive. "Combined with our existing Wi-Fi and Zigbee solutions and industry leading microcontroller portfolio, Atmel is positioned for substantial growth in the Internet of Things marketplace."