Toumaz Limited to Acquire Frontier Silicon

Toumaz Limited has agreed to acquire Frontier Silicon Limited, a leading supplier of semiconductor, module and software solutions for digital radio and connected audio systems, for a maximum consideration of up to £32.3 million ($50.3 million).

The group also announces the conditional placing of 285.6 million new ordinary shares at a placing price of 10.25 pence, raising £29.25 million ($45.6 million) before expenses. The placing shares have been placed at a premium by finnCap with both new and existing institutional investors.

The initial consideration is of £27.06 million ($42.1 million) in cash. Deferred consideration up to £5.2 million ($8.1 million) will be paid, dependent on the performance of the enlarged group, in cash and shares. Frontier has a more than £22 million ($34.3 million) revenue base and historically strong product margins, and brings important electronic engineering resource, with R&D centers in the UK, Hong Kong and China.

The acquistions provides strong technological alignment of Toumaz’s healthcare, radio and wireless chip technologies and Frontier’s expertise in semiconductor, module and software systems, creates a genuine total solution provider, as well as an opportunity for Toumaz to exploit Frontier’s established tier one customer base, including Bang & Olufsen, Bose, JVC, Panasonic, Philips, Pure, LG, Roberts Radio and Sony.

“This acquisition is consistent with our strategy for providing ultra-low power, high performance wireless communications across the healthcare, fitness and consumer electronics markets,” Anthony Sethill, CEO of Toumaz, said. “Bringing these two innovative UK technology companies will enable the enlarged group to exploit the strengths and opportunities of both businesses. Our wireless solutions have huge potential and combined with the software systems, commercial expertise and tier one customer access of Frontier, will create a significant total solution provider for the wireless communications market.

“This acquisition will also enable us to strengthen our commercial presence and provides us with essential engineering and R&D resource, allowing Toumaz to accelerate its profitable expansion towards becoming the global leader in complete wireless platforms,” Sethill added.