Dialog Semiconductor acquires Germany's Creative Chips

FILE PHOTO: Dialog semiconductor logo is pictured at a company building in Germering near Munich, Germany August 15, 2016. REUTERS/Michaela Rehle/File Photo

FRANKFURT (Reuters) - Chip designer Dialog Semiconductor DLGS.DE on Monday said it agreed to buy Germany's Creative Chips as part of its push into low-energy connectivity used for devices in the internet of things (IoT).

“The acquisition of Creative Chips is instrumental for Dialog, giving it a strong foothold in the IndustrialIoT market, while still highly complementary to Dialog’s current mixed-signal business,” Dialog CEO Jalal Bagherli said.

Creative Chips is expected to generate sales of about $20 million in 2019, Dialog said, adding revenues were expected to grow by a quarter per year over the next few years. The deal is expected to close during the fourth quarter.

Dialog, whose shares were 1.8% lower in early Frankfurt trade DLGS.F, will pay $80 million for the acquisition, with an additional consideration of $23 million based on revenues targets for the next two years.

The purchase will increase Dialog’s sales in the area of wireless low power connectivity, configurable mixed-signal and power management integrated circuits, it said.

Reporting by Christoph Steitz and Douglas Busvine, editing by Riham Alkousaa