Alphawave IP close OpenFive purchase of custom silicon IP
Alphawave IP Group plc, a global leader in high-speed connectivit, has completed the acquisition of OpenFive, adding scale and expanding expertise into custom silicon. The acquisition adds OpenFive’s high-speed connectivity system-on-chip (SoC) IP portfolio and a proven team based in India and Silicon Valley, as well as other global locations, that have been delivering custom silicon for over 15 years. The acquisition significantly increases Alphawave’s customer base globally from 281 currently to over 80, especially in North America, including a top two semiconductor memory supplier, a top three high performance computing (HPC) server manufacturer, a leading automated tester equipment manufacturer, and mission critical high-speed communications and industrial equipment manufacturers.
Tony Pialis, President and Chief Executive Officer of Alphawave said: “Today represents an important milestone for Alphawave. This acquisition accelerates our ambition to become a leading pure-play provider of connectivity technology, covering silicon IP and custom silicon like chiplets. The combination adds scale and expands our expertise into custom silicon. The combined company is well positioned to capitalise on the growth opportunities we see in the digital infrastructure markets.”
This acquisition nearly doubles the number of connectivity-focused IPs available to Alphawave customers from 80 to over 155 and will provide customers with a one-stop-shop for their bundled connectivity needs in the most advanced technologies at 5nm, 4nm, 3nm and beyond. This will include an expanded die-to-die connectivity portfolio that will accelerate chiplet delivery capabilities to existing and new customers.
OpenFive’s proven silicon development team enables Alphawave to offer leading edge data centre and networking custom silicon as well as enhancing its chiplet design capabilities. This accelerates Alphawave’s strategic goal to scale revenues by monetising its leading connectivity IP not only through IP licensing but advanced custom silicon design and delivery.
The combination of Alphawave’s leading high-speed connectivity with OpenFive’s IP portfolio is expected to generate material revenue synergies through bundling of IP and integrated IP sub-systems as well as leveraging the two companies’ respective strengths to win complex custom silicon design wins at leading edge process nodes.
As previously communicated, the transaction will be immediately EPS accretive to Alphawave. Forecast FY 2023 revenue for the combined group is anticipated to reach between US$325m to US$360m with a path to a yearly revenue run rate of over US$500m in 2024. 2023 adjusted EBITDA margins for the group are expected to be between 32-36% with 2025 adjusted EBITDA margins between 40-45% as revenues exceed US$500m.
The total consideration paid by Alphawave for completion was US$210m in cash plus customary working capital adjustments. As was previously reported, no debt was raised to finance the transaction.