Mobile phone mast-in-a-chip biz sells out for $50m
Blighty-based Picochip finds Californian sugardaddy
Mindspeed Technologies has agreed to buy UK femtocell leader Picochip for £33.4m ($51.9m), with more than half of that in cash, to help it jump into the burgeoning femtocell business.
Picochip employs about 150 people, most of them at its Bath offices, and leads the world in squeezing femtocell technologies into single chips. This makes it a nice match for Californian Mindspeed, which makes small cells of all kinds and also likes pushing ever more capability into its system on a chip (SoC) designs.
Neither company actually makes stuff, both design integrated chipsets and have them fabricated elsewhere for embedding in a third party's devices. But that's a good business to be in these days and while the market for femtocells - which are small, personal mobile phone base stations - hasn't exactly exploded, as some had hoped, Picochip is certainly one of the leading players.
In getting to that position Picochip has raised something in the region of $100m in venture cash, and borrowed another $9m in November 2010 from the Silicon Valley Bank - coincidentally the bank which is lending Mindspeed the cash to buy Picochip.
As a privately held company, Picochip doesn't publish detailed financials, but hasn't raised any more money since that loan and we're told that the original investors (and staff with shareholdings) are very happy with their position.
That position involves receiving $27.5m in cash, and 15 per cent of Mindspeed's stock, with the possibility of another $25m in early 2013 if performance goals are hit, which should motivate the sales team a bit.
Mindspeed assures us that it isn't planning to grab the IP and run, though the Picochip's intellectual property was part of the attraction. There is talk of a few job losses in administration, where roles are duplicated, but it’s the engineering staff that Mindspeed wanted.
Increasing scale is probably a good thing for both companies, and should the expected femtocell revolution never happen, then at least Picochip's technology can find a home in Mindspeed's micro- and pico-cell chips. ®
Wish I could buy one
I'd really like to be able to buy one to improve the coverage around my home.
Alas, only Vodafone supply them.
Really not sure why the operators and GSMA haven't got it sorted so that I can buy one that just allows me to select the network and it'll do all the integration.
Mast on a chip
Are you sure, normally they are big and made out of galvanised steel. No all the stuff in the box at the bottom...
While I would like better coverage at home...
...I don't know why I should pay Vodafone to cover their blackspots. Especially when they show the area as fine on their coverage maps.
If they were available on other networks too, I'm sure the end user's price might come down, or even pay for using my broadband's bandwidth for their network.
They've raised more than $100m in VC cash, but have also sold a lot of licences for their chip designs in the last few years since then so while we don't have accounts for the company it would be wrong to assume it's still burning VC cash.
The staff we spoke to were all pretty pleased with the result, the ones who had shareholdings at least.
This may help
These chaps sell a booster product: