SAN JOSE, Calif.--(BUSINESS WIRE)--July 10, 2006--Tessera
Technologies, Inc. (Nasdaq:TSRA):
-- Purchase Price to be Approximately $59.5 Million
-- High-Volume Camera Phone and Next-Generation DVD Markets
Targeted with Innovative Technology and Extensive Patent
-- Center of Excellence for Micro-Optics to be Established with
Renowned Development Team
Tessera Technologies, Inc. (Nasdaq:TSRA), a leading provider of
miniaturization technologies for the electronics industry, announced
it has signed a definitive agreement to purchase Digital Optics
Corporation, a leader in the development and design of micro-optical
solutions. The acquisition is another important milestone in Tessera's
long-term growth strategy and builds upon the wafer-level image sensor
packaging technology assets acquired from Shellcase, Ltd. in December
2005. The Digital Optics team and key technology will be components in
Tessera's development of low-cost, miniaturized imaging solutions for
high-volume consumer optics applications, such as camera phones,
next-generation DVD players and automotive applications.
Under the terms of the agreement, Tessera will pay approximately
$59.5 million in cash for all outstanding Digital Optics equity. This
transaction is subject to various standard closing conditions, and is
expected to close in the third quarter of 2006.
"This acquisition provides an additional path to significant
future growth for Tessera," said Bruce McWilliams, Tessera's chairman
and chief executive officer. "By leveraging our core competencies in
building IP businesses, we believe that by the end of the decade, we
can develop a consumer optics IP business with licensing and royalty
revenues of a similar scale to Tessera's current semiconductor
packaging business. The Digital Optics technology and renowned team of
experts in micro-optics, combined with our Shellcase wafer-level
packaging resources, will strengthen Tessera's ability to provide key
imaging solutions in a variety of high-growth, high-volume consumer
optics applications such as camera phones."
According to the most recent forecast from market research firm
Techno Systems Research (TSR), the market for camera phones will
increase to approximately 825 million units in 2009, representing a 21
percent compounded annual growth rate from 2005. The expensive and
complex optics of next-generation high definition DVD players, games
machines and drives, represent another application where Tessera
believes it can apply its expanded capabilities to miniaturize and
reduce the cost of optical systems.
"Once the acquisition is completed, Digital Optics will become a
wholly-owned subsidiary of Tessera," stated Mike Forman, Tessera's
interim chief financial officer. "Going forward, the Digital Optics
business will be structured similarly to Tessera with revenue derived
from licensing, royalties and services. In 2006, we expect Digital
Optics to contribute services revenue ranging from $7 million to $8
million, and the earnings impact is expected to be nonmaterial."
Digital Optics, headquartered in Charlotte, North Carolina, was
founded in 1994 by a team of experts in micro-optics led by Dr.
Michael Feldman. The company currently has 83 employees, including 11
PhDs. Its 100,000 square foot design, development and prototyping
facility will become Tessera's Micro-Optics Center of Excellence.
Tessera defines micro-optics as the use of microscopic structures to
shape and influence light. Digital Optics' technologies are utilized
in a number of applications including semiconductor equipment optics,
communications and photonics. In 2005, the company generated revenue
primarily by providing specialty lenses and optical sub-assemblies for
the semiconductor lithography and communications markets, as well as
by funded research and development for various consumer and government
applications. The company has 130 issued and pending patents in the
areas of micro-optics and optical integration.
Tessera expects to update its 2006 financial guidance when the
company reports its results for the second quarter ended June 30,
About Tessera Technologies, Inc.
Tessera Technologies, through its wholly-owned subsidiaries
Tessera, Inc. and Tessera Israel, is a leading provider of
miniaturization technologies for the electronics industry. Tessera
enables new levels of miniaturization and performance by applying its
unique expertise in the electrical, thermal and mechanical properties
of materials and interconnect. As a result, Tessera's technologies are
widely adopted in high-growth markets including consumer, computing,
communications, medical and defense. Tessera's customers include the
world's top semiconductor companies such as Intel, Samsung, Renesas,
Toshiba and Texas Instruments. The company's stock is traded on the
Nasdaq National Market under the symbol TSRA. Tessera is headquartered
in San Jose, California. www.tessera.com.
Safe Harbor Statement
This press release contains forward-looking statements, which are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
risks and uncertainties that could cause actual results to differ
significantly from those projected. Factors that might cause or
contribute to such differences include, but are not limited to,
fluctuations in Tessera's operating results due to the timing of new
license agreements and royalties, Tessera's ability to protect its
intellectual property and the risk of a decline in demand for
semiconductor products. You are cautioned not to place undue reliance
on the forward-looking statements, which speak only as of the date of
this release. Tessera's filings with the Securities and Exchange
Commission, including its Annual Report on Form 10-K for the year
ended December 31, 2005, and its Quarterly Report on Form 10-Q filed
for the quarter ended March 31, 2006, include more information about
factors that could affect the company's financial results.
Note: Tessera, Shellcase, MicroBGA, Compliant Chip, MicroZ and the
Tessera logo are registered trademarks of Tessera, Inc. All other
company, brand and product names may be trademarks or registered
trademarks of their respective companies.
CONTACT: Tessera Technologies, Inc.
Mike Forman, 408-894-0700
Daryl Larsen, 408-952-4364
Lippert/Heilshorn & Associates
Kirsten Chapman or Moriah Shilton, 415-433-3777
Public Relations Agency Contact:
Mark Plungy, 408-369-4675
SOURCE: Tessera Technologies, Inc.