"This acquisition and strategic alliance underscore the fundamental shift we are seeing in the global semiconductor industry and that is to focus on core competencies and engage with trusted partners for the non-differentiating elements of a company's business," said Dr. Alex Shubat, president, CEO and co-founder of Virage Logic.

Virage Logic said it will establish an R&D center in Eindhoven to develop new products based on the acquired CMOS I/O, analog mixed signal and System-on-Chip (SoC) infrastructure IP and to provide on-going support to NXP. These new products, expected to be commercially available in early 2011, will expand upon Virage Logic's product offering that includes processor solutions, interface IP solutions, embedded SRAMs and NVMs, embedded memory test and repair, logic libraries, and memory development software.

In consideration for the assets, NXP received 2.5 million shares of Virage Logic common stock, which are subject to transfer restrictions, and will receive a share of the future revenue generated by Virage Logic from licensing the transferred IP portfolio. Virage Logic expects the transaction to be accretive in the company's fourth fiscal quarter of 2010.

Virage Logic is a provider of both functional and physical semiconductor intellectual property (IP) for the design of complex integrated circuits. The company's product portfolio includes processor solutions, interface IP solutions, embedded SRAMs and NVMs, embedded memory test and repair, logic libraries, and memory development software.

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Announcement (October 12, 2009):

Virage has entered into a strategic agreement to acquire CMOS IP rights and certain engineering talent and equipment of NXP.

Based on the agreement, NXP will transfer 160 employees and the assets associated with selected advanced CMOS libraries, IP blocks and system on chip (SoC) architecture along with other classes of semiconductor IP, including approximately 25 associated patent families.

In consideration for the assets, NXP will receive 2.5 million shares of Virage common stock, which will be subject to transfer restrictions, and a share of the future revenue generated by Virage from licensing the transferred IP portfolio.

In addition, Virage will provide to NXP services surrounding the transferred IP for a 3.5-year period, and NXP will receive a 3.5 year license to Virage's extensive standard-products semiconductor IP portfolio for all future SoC designs. In consideration for the services and the license of the Virage IP portfolio, NXP will pay Virage $60 million over four years from the closing of the transaction.

Jones Day is acting as legal advisor to Virage on the transaction. The transaction is expected to complete by the end of 2009.

Deal Value (US$ Million) 14.28
Deal Type                Acquisition
Sub-Category             Asset Purchase
Deal Status              Completed: 2009-11-17

Deal Participants

Target (Company)   NXP Semiconductors Netherlands B.V. - CMOS Intellectual Property Rights and Equipment
Acquirer (Company) Virage Logic Corporation
Vendor (Company)   NXP Semiconductors Netherlands B.V.

Deal Rationale

The transaction will enable Virage to further strengthen its business.

Virage stated that, among its capabilities, STAR Silicon Browser provides the ability to extract embedded memory contents, to perform multi-corner characterization, and to assess reliability and temperature dependencies. It also allows a user to classify and correlate defects, analyze redundancy utilization and to precisely localize physical failures by zooming into the physical structure and locations of memory instances based on retrieved memory failures, as opposed to simply reporting the logical address of failed cells. As a result, design and test engineers can simplify the chip bring-up process. In addition to accelerating the process, STAR Silicon Browser also gives engineers the freedom to set up the test at their desktop without the need for pre-defined patterns, facilitating full device debug and memory characterization without utilizing expensive automatic test equipment.

"Since the introduction of the STAR Memory System in 2001, Virage Logic has been providing industry leading embedded memory test, diagnosis and repair solutions that help IDMs, fabless houses and foundries accelerate their ramp to volume production," said Dr. Yervant Zorian, vice president and chief scientist at Virage Logic. "With the addition of the new STAR Silicon Browser, users have access to a comprehensive end-to-end solution for the entire SoC realization process from initial design planning all the way through post silicon bring up and volume manufacturing."

Virage Logic's new STAR Silicon Browser will be available for volume shipment in January 2010.

((Comments on this story may be sent to newsdesk@closeupmedia.com))

Announcement (October 12, 2009):

Virage has entered into a strategic agreement to acquire CMOS IP rights and certain engineering talent and equipment of NXP.

Based on the agreement, NXP will transfer 160 employees and the assets associated with selected advanced CMOS libraries, IP blocks and system on chip (SoC) architecture along with other classes of semiconductor IP, including approximately 25 associated patent families.

In consideration for the assets, NXP will receive 2.5 million shares of Virage common stock, which will be subject to transfer restrictions, and a share of the future revenue generated by Virage from licensing the transferred IP portfolio.

In addition, Virage will provide to NXP services surrounding the transferred IP for a 3.5-year period, and NXP will receive a 3.5 year license to Virage's extensive standard-products semiconductor IP portfolio for all future SoC designs. In consideration for the services and the license of the Virage IP portfolio, NXP will pay Virage $60 million over four years from the closing of the transaction.

Jones Day is acting as legal advisor to Virage on the transaction. The transaction is expected to complete by the end of 2009.

Deal Value (US$ Million) 14.28
Deal Type                Acquisition
Sub-Category             Asset Purchase
Deal Status              Completed: 2009-11-17

Deal Participants

Target (Company)   NXP Semiconductors Netherlands B.V. - CMOS Intellectual Property Rights and Equipment
Acquirer (Company) Virage Logic Corporation
Vendor (Company)   NXP Semiconductors Netherlands B.V.

Deal Rationale

The transaction will enable Virage to further strengthen its business.