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Atmel seeks to solidify SmartConnect portfolio with NMI

17 Jul 2014  | Ismini Scouras

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Atmel Corp. is proposing to pay $140 million to acquire Newport Media Inc. (NMI)—another key investment advancing its IoT strategy that is sure to be a boon to its SmartConnect wireless portfolio.

The deal will score the microcontroller maker two vital modules—802.11n Wi-Fi and Bluetooth. NMI has a strong position in the wireless chip sector, but it still needed the ability to offer all major Wi-Fi standards to become a leading player, said Atmel President and CEO Steve Laub.

"Winning in IoT requires a broad portfolio of high-performance, low-power, integrated, microcontroller-based connectivity solutions," Laub said in a conference call following the announcement of the deal. "We have been open about our desire to add Bluetooth to our portfolio."

The deal comes at a good time for Atmel, which is one of the founding members of the Open Interconnect Consortium (OIC), a group that was formed last week to create a specification to connect IoT devices to each other or to the cloud (see Tech giants advance interoperability for IoT) Indeed, Atmel identified the IoT sector's potential early-on and has made strategic acquisitions over the years to beef up its wireless offerings.

Through its acquisition of Ozmo Inc. in December 2012, Atmel added low-power Wi-Fi, including a, b, and g bands, to its line-up—802.11.n Wi-Fi provides higher performance and supports video streaming. In October 2011, it bought Advanced Digital Design S.A. of Spain, a maker of SoC solutions for powerline communications applications, including smart meters, energy management, and automation. Additional assets that Atmel has developed and acquired over time include ZigBee technology.

"NMI brings highly integrated, low-power Wi-Fi and Bluetooth-certified combo products that will accelerate seamless communication and connectivity across wireless networks," said Laub. "The addition of NMI will also expedite introduction of Atmel's low-power Bluetooth products."

The NMI deal, which is expected to close in the third quarter of this year, may yield an additional earn-out payment of $30 million, if certain revenue goals are met in the next two years. NMI posted revenues of $43 million in 2013.

According to Will Strauss, an analyst at Forward Concepts, NMI has been best-known for its mobile TV chips and, more recently, its connectivity chips. "They never knew that they were in the IoT market until now," he says.

He doubts Atmel is interested in pursuing the mobile TV market since it isn't very popular in North America and Europe, but in China and Japan. However, he recognises the synergies between the two companies. "Atmel is in the home automation market [in IoT] based on its 802.15.4 wireless devices, and that ties in nicely with Newport Media's strengths."

In addition to the automation market, Atmel's low-power MCUs with NMI's 802.11n WiFi and Bluetooth-certified products will be targeted at industrial and consumer applications.

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