News
French firm proposes to buy Atmel's smart card IC business
French fabless supplier of smartcard chips Inside Contactless SA has submitted to Atmel Corp. a signed agreement to purchase, for cash consideration, Atmel's Secure Microcontroller Solutions (SMS) business based in Rousset, France, and East Kilbride, UK.
Inside Contactless explained that this combination would enable the company to meet the growing global demand for solutions in the payments market, the emerging NFC mobile commerce market and the electronic identification market.
"The products, technologies, customer base and operations of the SMS business would complement our own, resulting in a world-class company with greater depth and breadth to service our customers," stated Remy de Tonnac, CEO of Inside Contactless. "Atmel's SMS business has succeeded because of its people, skills and technology, and we now expect these strengths to reinforce our leadership in contactless technology and allow us to extend our business into new areas. We believe the result will be a fabless semiconductor category leader with the requisite technology, products and scale to create significant value for our customers and investors."
Atmel said it is presenting Inside Contactless' offer to the members of the Works Council in Rousset today (May 4). Once the information and consultation process with the Rousset Works Council is completed, Atmel said it will seek authorization from its Board of Directors to enter the purchase agreement with Inside. The transaction is expected to close in the third quarter of 2010.
As part of the proposed transaction, Atmel said it would make a minority equity investment in Inside Contactless.
In parallel, Inside Contactless said the transaction would be financed by the existing Inside Contactless' investors led by Gimv and Sofinnova Partners, along with the French sovereign wealth fund, Fonds Strategique d'Investissement (FSI).
Gimv notified in a separate statement that it planned to invest 11.2 million euros ($14.8 million) in a series-D round to help Inside Contactless finance the takeover of Atmel's SMS business.
Inside Contactless also said it would enter into a multiyear supply agreement to continue sourcing wafers from the manufacturing operation in Rousset that Atmel recently agreed to sell to LFoundry GmbH.
Financial terms of the proposed Inside Contactless transaction and separate minority equity investment in the French company remained undisclosed.
In 2008, Samsung Ventures America invested in Inside Contactless. Building upon investments from Nokia Growth Partners, Motorola Ventures and institutional investors, this participation then brought the total investment in the company to about $42 million.
Inside Contactless is headquartered in Aix-en-Provence, France, with offices in Paris, Shanghai, Singapore, Warsaw, Seoul, Bangkok and San Francisco.
Atmel also announced financial results for its first quarter ended March 31, 2010. Revenues in the first quarter of 2010 were $348.6 million, up 1.4 percent from $343.6 million in the fourth quarter of 2009 and up 28.4 percent from the $271.5 million reported in the first quarter of 2009.
Net income, on a GAAP basis, was $16.6 million or $0.04 per diluted share in the first quarter of 2010. This compares with a GAAP net loss of $83.3 million or a loss of $0.18 per diluted share in the fourth quarter of 2009 and a net income of $3.6 million or $0.01 per diluted share in the first quarter of 2009.
"We are especially pleased to have achieved record revenues for our microcontroller business," said Steve Laub, president and chief executive, in a statement. officer. "Our microcontroller and touch solutions continue to gain substantial design wins, and we expect robust growth for these products throughout the year."