Will add Proven NOR Flash Memory Products for Key Customers
Integrated Silicon Solution, Inc. (Nasdaq: ISSI) today announced that it has entered into a definitive agreement with the major shareholders of Chingis Technology Corporation ("Chingis") under which ISSI intends to acquire all of the outstanding shares of Chingis pursuant to a cash tender offer valued at $33 million, or $16 million net of the approximately $17 million in cash expected to be on Chingis' balance sheet at closing. The transaction is expected to close in September 2012. Completion of the transaction is conditioned on at least 60% of the Chingis shares being tendered, regulatory approvals in Taiwan and other customary closing conditions. Founded in 1995, Chingis provides a variety of NOR flash memory technologies used in standalone and embedded applications with more than 80 worldwide patents and patents pending. The company has 75 employees in Taiwan, Korea, China and the United States and its stock trades on the Emerging Stock Market in Taiwan (TSE: 3408). For the year ended December 31, 2011, Chingis reported annual revenue of $39.6 million and net income of $2.6 million.
The acquisition of Chingis will strengthen ISSI's specialty memory product portfolio by adding another specialty memory technology to expand the Company's future growth opportunities. The addition of flash memory is expected to meet demand for these solutions from many of ISSI's existing customers. ISSI intends to leverage its existing infrastructure to increase scale and lower Chingis' costs, utilize its foundry relationships to grow Chingis' embedded business and expand the Chingis flash product line based on customers' needs. The companies share a number of distributor and customer relationships particularly in Asia.
Scott Howarth, ISSI's President and CEO, commented, "For our target markets, the NOR flash product line offers many of the same key attributes as our specialty memory portfolio, including stable pricing and gross margins, plus long product life cycles. Our automotive and industrial customers have specifically requested high-quality NOR flash memory products for their long life cycle applications, and, upon completion of the transaction, we will be pleased to be able to offer these solutions. Chingis' products are highly complementary to our existing sales channels due to the unique performance and durability characteristics required by our customers' applications. We look forward to expanding our customer relationships and pursuing additional growth opportunities in this exciting new market."