Allegro MicroSystems, Inc. (“Allegro”) (Nasdaq: ALGM), a global
leader in power and sensing semiconductor technology for motion
control and energy efficient systems, today announced that it has
signed a definitive agreement to acquire Crocus Technology
(“Crocus”) for $420 million in cash.
Crocus is a privately held company and a leader
in advanced Tunnel Magnetoresistance (“TMR”) sensor technology.
This acquisition brings unique technology and products well suited
to serve high-growth applications in e-Mobility, Clean Energy and
Automation, supported by more than 200 patents. The magnetic
sensing market is expected to increase to over $5 billion by 2030,
with TMR representing the fastest growing segment and expected to
approach $1 billion in addressable market by 2030. Automotive and
Industrial applications are expected to fuel TMR’s estimated 30%
CAGR, which significantly exceeds the growth of the overall
magnetic sensing market.
“Allegro has invested in TMR technology for the
past decade, providing our customers with innovative and
high-performing solutions enabling them to design products with
optimal performance. We are seeing broader application of TMR
technology as the megatrends of Electrification and Automation
accelerate. This highly complementary acquisition aligns perfectly
with Allegro’s growth initiatives and our focus on e-Mobility,
Clean Energy and Automation,” said Vineet Nargolwala, President and
CEO of Allegro. “In addition to accelerating our TMR roadmap and
further strengthening our leadership in Magnetic Sensors, the
acquisition will allow us to offer a broader and more
differentiated product offering to benefit our customers. We also
welcome the deep expertise and technical talent that Crocus will
add to the Allegro team.”
Zack Deiri, President and CEO of Crocus said,
"The Crocus team is excited to join Allegro and unite complementary
expertise to create superior, highly differentiated customer
solutions. By combining Crocus’ best-in-class advanced TMR
technology with Allegro’s long-standing partnerships with leading
Automotive and Industrial OEMs and Tier-1’s, together, we expect to
accelerate adoption of TMR in targeted Automotive and Industrial
markets. I am very proud of what Crocus has accomplished and am
excited to optimize our TMR technology’s full potential together
with Allegro."
The planned acquisition of Crocus will be funded
with a combination of cash on hand and a new debt issuance. The
transaction has been approved by the board of directors of both
companies. Subject to customary regulatory approvals and closing
conditions, the transaction is expected to close by the end of
calendar year 2023. Approval by Allegro’s stockholders is not
required in connection with the proposed transaction.
Webcast
A webcast will be held on Tuesday, August 8,
2023, at 8:30 a.m. Eastern Time and can be accessed using the
following webcast link: Click Here. For dial-in
access, participants can register using the following link:
Click Here. Vineet Nargolwala, President and Chief
Executive Officer, Derek D’Antilio, Chief Financial Officer and
Mike Doogue, Chief Technology Officer, will discuss Allegro’s
planned acquisition of Crocus.
The webcast will be available in the Investor
Relations section of the Company’s website at
investors.allegromicro.com. A recording of the webcast will be
posted in the same location shortly after the call concludes and
will be available for at least 90 days.
About Crocus
Crocus Technology is a leader in providing
advanced TMR sensor technology solutions to designers and
manufacturers of industrial, automotive and consumer electronics.
Crocus develops XtremeSense TMR advanced sensor technology which
provides the highest sensitivity, lowest power consumption and
smallest size by comparison to other magnetic technologies such as
Hall, AMR and GMR. Founded in 2006, Crocus is a privately held,
VC-backed company with over 200 patents and approximately 85
employees. The company is headquartered in Milpitas, California,
with an R&D facility in Grenoble,
France. www.crocus-technology.com
About Allegro MicroSystems
Allegro MicroSystems is a leading global
designer, developer, fabless manufacturer and marketer of sensor
integrated circuits (“ICs”) and application-specific analog power
ICs enabling emerging technologies in the automotive and industrial
markets. Allegro’s diverse product portfolio provides efficient and
reliable solutions for the electrification of vehicles, automotive
ADAS safety features, automation for Industry 4.0 and power saving
technologies for data centers and green energy applications.
Forward Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. We intend such forward-looking statements to be
covered by the safe harbor provisions for forward-looking
statements contained in Section 27A of the Securities Act of 1933,
as amended and Section 21E of the Securities Exchange Act of 1934,
as amended. All statements other than statements of historical
facts contained in this press release should be considered
forward-looking statements, including, without limitation,
statements regarding the expected benefits of a business
combination with Crocus Technology. These statements involve known
and unknown risks, uncertainties and other important factors that
may cause our actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. In some cases, you can identify forward-looking
statements by terms such as “aim,” “may,” “will,” “should,”
“expect,” “exploring,” “plan,” “anticipate,” “could,” “intend,”
“target,” “project,” “would,” “contemplate,” “believe,” “estimate,”
“mission,” “predict,” “potential,” “seek,” or “continue,” or the
negative thereof and similar words and expressions, although not
all forward-looking statements contain these words. No
forward-looking statement is a guarantee of future results,
performance, or achievements, and one should avoid placing undue
reliance on such statements.
Forward-looking statements are based on
management’s current expectations, beliefs and assumptions and on
information currently available to us. Such beliefs and assumptions
may or may not prove to be correct. Additionally, such
forward-looking statements are subject to a number of known and
unknown risks, uncertainties and assumptions, and actual results
may differ materially from those expressed or implied in the
forward-looking statements due to various factors, including, but
not limited to, those identified in Part II, Item 7. “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations,” and Part I, Item 1A. “Risk Factors” in our Annual
Report on Form 10-K for the year ended March 31, 2023. These risks
and uncertainties include, but are not limited to: downturns or
volatility in general economic conditions,; our ability to compete
effectively, expand our market share and increase our net sales and
profitability; our reliance on a limited number of third-party
semiconductor wafer fabrication facilities and suppliers of other
materials; our failure to adjust purchase commitments and inventory
management based on changing market conditions or customer demand;
shifts in our product mix or customer mix, which could negatively
impact our gross margin; the cyclical nature of the analog
semiconductor industry; any downturn or disruption in the
automotive market; our ability to compensate for decreases in
average selling prices of our products and increases in input
costs; our ability to manage any sustained yield problems or other
delays at our third-party wafer fabrication facilities or in the
final assembly and test of our products; our ability to accurately
predict our quarterly net sales and operating results; our ability
to adjust our supply chain volume to account for changing market
conditions and customer demand; our dependence on manufacturing
operations in the Philippines; our reliance on distributors to
generate sales; the effects of COVID-19 on our supply chain and
customer demand; our ability to develop new product features or new
products in a timely and cost-effective manner; our ability to
manage growth; any slowdown in the growth of our end markets; the
loss of one or more significant customers; our ability to meet
customers’ quality requirements; uncertainties related to the
design win process and our ability to recover design and
development expenses and to generate timely or sufficient net sales
or margins; changes in government trade policies, including the
imposition of export restrictions and tariffs; our exposures to
warranty claims, product liability claims and product recalls; our
dependence on international customers and operations; the
availability of rebates, tax credits and other financial incentives
on end-user demands for certain products; risks, liabilities, costs
and obligations related to governmental regulation and other legal
obligations, including export control, privacy, data protection,
information security, consumer protection, environmental and
occupational health and safety, anti-corruption and anti-bribery,
and trade controls; the volatility of currency exchange rates; our
ability to raise capital to support our growth strategy; our
indebtedness may limit our flexibility to operate our business; our
ability to effectively manage our growth and retain key and highly
skilled personnel; our ability to protect our proprietary
technology and inventions through patents or trade secrets; our
ability to commercialize our products without infringing
third-party intellectual property rights; disruptions or breaches
of our information technology systems or those of our third-party
service providers; our principal stockholders have substantial
control over us; the inapplicability of the “corporate opportunity”
doctrine to any director or stockholder who is not employed by us;
anti-takeover provisions in our organizational documents and under
the General Corporation Law of the State of Delaware; our inability
to design, implement or maintain effective internal control over
financial reporting; changes in tax rates or the adoption of new
tax legislation; the negative impacts of sustained inflation on our
business; disruptions in the banking and financial sector that
limit our or our partners’ ability to access capital and
borrowings; the physical, transition and litigation risks presented
by climate change; and other events beyond our control. Moreover,
we operate in an evolving environment. New risk factors and
uncertainties may emerge from time to time, and it is not possible
for management to predict all risk factors and uncertainties. Our
risk factors may be updated or supplemented from time to time in
our other filings with the SEC, which are accessible on the SEC’s
website at www.sec.gov and the Investors Relations page of our
website at investors.allegromicro.com.
You should read this press release with the
understanding that our actual future results may be materially
different from what we expect. We qualify all of our
forward-looking statements by these cautionary statements. All
forward-looking statements speak only as of the date of this press
release and, except as required by applicable law, we do not plan
to publicly update or revise any forward-looking statements
contained herein, whether as a result of any new information,
future events, changed circumstances or otherwise.
Contact:Jalene HooverVP of
Investor Relations & Corporate Communications+1 (512)
751-6526jhoover@allegromicro.com
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