OSI Systems Announces Acquisition of Silicon Microstructures Inc.
18 November 1998
OSI Systems Announces Acquisition of Silicon Microstructures Inc. From Exar Corp. for $6.5 Million
HAWTHORNE, Calif.--Nov. 18, 1998--
Acquisition Adds Silicon Pressure-Sensor Capabilities to Company's
Technology Platform; Company's Fourth Acquisition in Calendar 1998
OSI Systems Inc. Wednesday announced that it has acquired Silicon Microstructures Inc. ("SMI") from Exar Corp. , based in Fremont, Calif.
The purchase price is $6.5 million in cash, with $2.6 million of the total to be paid at the closing of the transaction and $3.9 million at an undisclosed future date, based upon future sales.
SMI was founded in 1991 by Dr. Jim Knutti and Dr. Henry Allen, two pioneers in the development of silicon microstructure pressure and acceleration sensors using proprietary Micro-Electro Mechanical Structures (MEMs) Technology as well as fusion and anodic bond technique resulting in compound multi-layered structures using bulk or surface micro-machining.
SMI's products are ultra-precise mechanical sensing structures that provide an interface between the physical world and the electronic world of signal processing. They include ultra-low-pressure sensors that are significantly more precise than other silicon pressure sensors on the market, low-cost, full-feature accelerometers and versatile pressure-die products.
The products are used in automotive applications such as emission control, engine control and brakes, as well as in disposable medical devices and industrial systems for heating and ventilation.
After the acquisition, SMI will be a wholly owned subsidiary of OSI. Its President, Jim Knutti, will retain the title and duties of President of the subsidiary company.
"This is an exciting opportunity for SMI to leverage the unique market position we enjoy, especially in the area of high-performance pressure sensors," said Knutti. "OSI's optical sensors and our products share parallel foundry and manufacturing requirements, and apply similar technological skills sets to differing parameters and customer requirements.
"As a member of the OSI family of companies, SMI will gain access to significant resources that will open up new markets for us. Going forward, SMI and OSI's UDT Sensors Division plan to follow similar strategies in higher-level packaging and system-level product development. OSI's strengths will broaden our technology platform and expose our capabilities to customers we would not otherwise be in a position to serve."
Commenting on the acquisition, Deepak Chopra, Chairman and CEO of OSI Systems, said, "This transaction makes a lot of sense for OSI Systems. In addition to giving us a Silicon Valley presence, it also provides us with valuable additional capabilities that leverage our existing core manufacturing expertise.
"Currently, we base many of our products on technology that interfaces light with electronics on a silicon platform. SMI's products provide a silicon-based bridge between pressure and electronic signal processing. The parallels in manufacturing processes are significant enough that all of SMI's currently outsourced manufacturing will be rapidly integrated into our facilities with little added expense.
"Strategically, SMI puts us into the heart of several new markets including the automotive and HVAC industries," continued Chopra. "Additionally, the customer opportunities and channels of distribution we have identified in the area of medical devices and systems will serve us well as we integrate SMI's work in medical pressure sensors.
"SMI's sensors are used in diverse applications including non-invasive blood pressure instruments and metered intravenous drug delivery systems. Our hope is to build on this platform in much the same way we have grown our optoelectronic business."
Don Ciffone, President and CEO of Exar, commented, "The Silicon Microstructures unit pioneered the technology for low-pressure silicon sensors, and enjoys a distinctive technology position in the market. However, we determined that the large-scale commercialization of that technology requires a manufacturing capability that is not consistent with Exar's strategy to be a fabless semiconductor supplier.
As part of OSI Systems, the Silicon Microstructures unit will have access to the resources necessary to successfully move the technology forward."
Exar designs, develops and markets innovative, system-oriented analog and mixed-signal integrated circuits for video and imaging and communications markets. The Company, based in Fremont, had fiscal 1998 revenues of $102.0 million and employs about 290 people worldwide.
About the Company
OSI Systems, with headquarters in Hawthorne, is a vertically integrated worldwide provider of devices, subsystems and end-products based on optoelectronic technology.
The Company designs and manufactures optoelectronic devices, systems and value-added subsystems for original equipment manufacturers for use in a broad range of applications, including security, medical diagnostics, telecommunications, office automation, aerospace, computer peripherals and industrial automation.
In addition, the Company utilizes its optoelectronic technology and design capabilities to manufacture security and inspection products that it markets worldwide to end users under the "Rapiscan," "Metor" and "Secure" brand names. These products are used to inspect people, baggage, cargo and other objects for weapons, explosives, drugs and other contraband.
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