Dialog Semiconductor plc has announced an agreement with Apple Inc. to license certain of its power management technologies, transfer certain of its assets and over 300 employees to Apple to support chip research and development.
Apple will pay $300 million in cash for the transaction and prepay $300 million for Dialog products to be delivered over the next three years. The company says that the employees who are being transferred have worked closely with Apple for many years, and this transition will foster deeper collaboration between the two companies.
Dialog also announces that it has been awarded a broad range of new contracts from Apple for the development and supply of power management, audio subsystem, charging and other mixed-signal integrated circuits. The Revenue from the new contracts is expected to be realized starting in 2019 and accelerating in 2020 and 2021. Dialog’s 2018 revenue will not be affected by this agreement, and the company will continue shipments of current products in production to Apple. The transaction is expected to be completed in the first half of 2019.
Johny Srouji, Apple’s senior vice president of Hardware Technologies said:
Dialog has deep expertise in chip development, and we are thrilled to have this talented group of engineers who’ve long supported our products now working directly for Apple. Our relationship with Dialog goes all the way back to the early iPhones, and we look forward to continuing this long-standing relationship with them.
Jalal Bagherli, CEO of Dialog, said:
This transaction reaffirms our long-standing relationship with Apple and demonstrates the value of the strong business and technologies we have built at Dialog. Going forward, we will have a clear strategic focus, building on our custom and configurable mixed-signal IC expertise and world-class power-efficient design. Our execution track record, deep customer relationships, and talented employees give us great confidence in our future growth prospects.
We believe that this transaction is in the best interests of our employees and shareholders who will benefit from a business with enhanced focus, strong growth prospects and additional financial flexibility to invest in strategic growth initiatives.