Last year, Microsemi Corp., after the merger with Actel corp. into a vast analog and power company. There was voice among its executives that it was not the last word on acquisitions. Now, after a series of almost hostile bids. Microsemi has acquired the company Zarlink Semiconductors Inc. based in Ottawa, Ontario, for about $633 million.
History
In 1973, Terry Matthews and Michael Coupland established Mitel Corporation, which was the parent company of Zarlink. In 1982, the company created the first T1/E1 framer chip in the industry and then launched the first echo cancellation chip in the industry in 1996. Then in 1998, the company acquired GEC-Plessey Semiconductor in the UK for US $225 million cash from General Electric Company. The acquisition brought into its fold wireless technology and communications ASIC and systems integration skills, including RF (Radio Frequency) technologies. The combined semiconductor business thus ranked Mitel among the top ten networking companies globally.
Reintroduction
Zarlink renamed its semiconductor division. Zarlink is taken as a reference from the Latin term “Caesar” or Russian term “tsar,” which means “one having great power or authority.” The second part of the word is link, which means “to connect or be connected”. This division has been a pure play semiconductor company specialized in markets without being influenced by the sale of Zarlink. Over time, it had become virtually fabless by divesting into third parties its fabrication plants and other manufacturing facilities and sole outsourcing majority of its products.
Establishment of Foundry
In 2002, Zarlink sold the foundry in Bromont, Quebec, Canada, to Dalsa Corporation. Additionally, Zarlink sold the wafer fabrication facility in Plymouth, United Kingdom, to X-FAB Semiconductor Foundries AG. Furthermore, the company introduced its first high-density CESoP (Circuit Emulation Services-over-Packet) packet processor in 2002, enabling carriers to continue transferring TDM traffic over the widely deployed IP networks.
Products
In 2005, Zarlink introduced the ZL70100 ultra-low-power transceiver chip, designed to operate under the FCC and ETSI’s Medical Device Radiocommunications Service standard. This chip linked implanted medical devices with base stations. In 2008, the ZL70101 version of the chip won an EE Times Product of the Year award. By the end of that year, Zarlink had shipped over 30,000 modules with this chip to St. Jude Medical for use in implanted defibrillators. Engineers designed the chip and module for integration into various medical implantable and external instruments. Hence including pacemakers, defibrillators, and devices for treating patients with dystonia, acute pain, Parkinson’s, epilepsy, and advanced monitoring, diagnostic, and therapeutic applications. Zarlink bought Legerity for US$134.5 million of cash. Which is a private former division of AMD based in Austin, Texas in June 2007. Legerity was a provider of analog voice technologies for carrier, enterprise and residential gateway equipment.
Microsemi, an internal company estimating $800 million, has several “unsolicited” offers for the turnaround of Zarlink Semiconductors. After being released, Microsemi was forced to improve its valuation of the company. In response to increased offers, Zarlink’s Board initiated strategic alternatives review process. Microsemi ultimately made an agreement to acquire Zarlink in October 2011 for $3.98 a share, 69% above the trading price, giving a total of over $630 million consideration.
