Silicon Labs to buy Z-Wave business from Sigma after merger fails

Business news | February 1, 2018

By Wisse Hettinga

Z-Wave represents one of the broadest and most recognizable home automation protocols, and would broaden Silicon Labs’ push into the IoT and smart home. The announcement came after Silicon Labs indicated that initial closing conditions for the original merger deal could not be met.

The sale to Silicon Labs is to be structured as an asset sale transaction. Following its completion, Sigma Designs says that it intends to initiate a plan of liquidation, which will include a “substantial” initial cash distribution to its shareholders.

“We conducted an extensive and thorough review process over several months, and are pleased to have achieved what we believe is a positive outcome for our shareholders,” says Thinh Tran, CEO of Sigma Designs. “While Sigma Designs has built a strong Z-Wave business and established itself as a leader in the home automation market, it became increasingly apparent that the significant investment needed to maintain our strong position would have been challenging against much larger competitors in a consolidating semiconductor industry.”

The company says that it is exploring alternatives to increase the available cash for distribution to shareholders through divestment of additional businesses, including its home connectivity business, its mobile IoT business, remaining assets of its Smart TV and set-top box businesses, and other assets. Sigma has already begun a wind-down process for its Smart TV and set-top box business and says it plans to wind down or divest its remaining businesses over the next 12 months.

Sigma Designs expects that the Z-Wave asset transaction will close in either the late first or early second calendar quarter of 2018.

www.sigmadesigns.com
www.silabs.com