Gennum acquires Tundra Semiconductor for $86M

Gennum Corp, one of Canada's oldest standalone technology companies, is acquiring Ottawa-based Tundra Semiconductor Corp. Established in 1973, the Burlington ON-based Gennum has signed a definitive agreement to purchase Tundra for $86 million comprised of $55 million in cash and 8 million common Gennum shares. Gennum shareholders will own 82% of the merged company, while Tundra shareholders will own 18%.

Gennum designs semiconductors and intellectual property cores for consumer connectivity, enterprise, video broadcast and data communications products.

Tundra is a designer, developer and marketer of integrated circuits for system interconnections for communications, computing and storage companies.

research intensive companies

The combination of the two highly research-intensive companies will boost Gennum's strategy of extending its high-speed signal expertise to a broader set of markets, estimated at $1.9 billion worldwide. Tundra has particularly strong sales channels in Asia and China.

In 2007, Gennum had revenue of $139.6 million and R&D expenditures of $44 million, down 2% from $44.9 million in 2006. In late 2007, Gennum sold its audio and wireless division and associated manufacturing operations to Gores Equity, a US-based private equity firm. The divestment reduced 2008 revenue to $126.9 million and R&D outlays to $36.6 million.

In 2007, Tundra had revenue of $85.3 million and R&D expenditures of $30.2 million, up 18.4% from $25.5 million in 2007. In 2008, revenue dropped to $70.6 million, a 17% decrease over FY07 while R&D declined 17.9% to $24.8 million.

Although Tundra was officially incorporated in 1995, its roots stretch back to 1983 and Calmos Semiconductor which was acquired by Newbridge Networks Corp in 1989 and formed the basis of the Newbridge Microsystems division. Spun out in 1995 with an IPO in early 2000, Tundra brings to Gennum an increased market presence and an expanded product line, including digital switch and bridge products.

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