TI Acquires Dot Wireless, a Leader in CDMA Wireless Technology
Strength in IS-2000 Enables TI to Deliver Wireless Solutions for All 3G Standards
Dallas (June 29, 2000) - Texas Instruments Incorporated (NYSE: TXN), the world leader in programmable digital signal processors (DSPs) and analog chips and the leading supplier of semiconductors to the wireless industry, announced today that it has reached a definitive agreement to acquire Dot Wireless, Inc., a leading expert in third generation (3G) CDMA wireless technology. Dot Wireless is a privately held company that develops and markets 3G wireless CDMA technologies, software and transceiver reference designs enabling the growing convergence of data and wireless communication services.
This acquisition enables TI to expand its offering of leading programmable DSP and analog-enabled wireless solutions across all 2.5G and 3G wireless standards and markets, including IS-2000. Dot Wireless has an advanced 3G-system architecture and protocol software suite providing efficient power consumption for both voice and high-speed data applications. It offers wireless system design capability for the launch of new 3G devices.
"Dot Wireless's expertise brings even more strength to TI's 3G wireless offerings," said Gilles Delfassy, TI vice president and manager of worldwide wireless communications. "Dot Wireless brings expertise in both IS-2000 and Wideband-CDMA and will support TI's development of technologies for both standards."
Wideband CDMA, or W-CDMA, is designed to support the 3G evolution from today's GSM, TDMA and PDC systems. IS-2000 is designed to support the evolution from today's IS-95 systems. TI is working with industry leaders, including Nokia, Ericsson and Sony, to incorporate TI technology in their next generation handsets and mobile computing devices. Dot Wireless's skills in IS-2000 will broaden TI's 3G wireless solutions.
"Dot Wireless's engineering team is made up of internationally recognized leaders in the field of CDMA technology," Delfassy said. "TI is confident that we can build on our second generation leadership and expand our position for programmable DSP-based solutions for wireless handsets in 3G with the help of Dot Wireless's expertise."
TI's DSP-based wireless platforms use the world's most popular programmable DSP - the C5000 family - and operate on all wireless standards. More than 60 percent of all digital wireless phones use TI DSPs. More than 80 percent use TI DSP or analog technology.
"We're very excited to become part of the world's premier wireless semiconductor company," said Rick Kornfeld, president, chief executive officer and co-founder of Dot Wireless. "The skills we bring to TI for 3G wireless complement their current offerings, giving the company a broad set of wireless solutions for all 3G standards."
The wireless market is expected to grow to more than 1 billion subscribers by 2002 according to industry analyst Dataquest. 3G phones will enable a host of new data and broadband capabilities for phones and mobile computing devices. Initial deployment of 3G phones is expected to begin next year.
Dot Wireless employs about 75 people. It will become part of TI's wireless group and operate under the Texas Instruments name. As part of this acquisition, TI will establish a wireless technology center in San Diego, joining other TI wireless technology centers in Dallas, Texas; Nice, France; Tsukuba, Japan; Aalborg, Denmark; and Kfar Saba, Israel.
The acquisition is being made through a stock-for-stock transaction. Under the terms of the agreement, TI common stock will be exchanged for all outstanding shares of Dot Wireless (including all stock options) for an aggregate transaction value of $475 million.
The boards of directors of both companies have approved the acquisition which is expected to be completed by the end of the third quarter. The transaction will be accounted for using the purchase method of accounting and is intended to qualify as a tax-free exchange of shares under IRS regulations. Completion of the acquisition is contingent upon the applicable regulatory reviews and other customary conditions. Excluding purchased in-process research and development costs and amortization of acquisition-related assets, the acquisition is not expected to be material to TI's earnings per share.
Safe Harbor Statement: Statements contained in this press release regarding the proposed transaction and its effect on TI's earnings per share, statements regarding the implementation of 3G technologies and other statements of management's beliefs, goals and expectations may be considered "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995, and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. The expected earnings per share impact is based on assumptions with respect to TI's results of operations. The actual results of operations may differ. Statements regarding the implementation of 3G technologies are based on expected developments in the wireless phone market, which may be affected by actual demand for 3G devices, the ability of OEMs to develop and manufacture 3G devices and the development and adoption of competing wireless standards or technologies. In addition, the following factors and those discussed in TI's most recent filing on Form 10-K could cause actual results to differ materially from the statements contained in this press release: the ability to consummate the acquisition; the ability of TI to successfully integrate Dot Wireless's operations and capitalize on the combined technologies and the continued growth of the wireless market. We disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.
NOTE TO EDITORS: Texas Instruments Incorporated is the world leader in digital signal processing and analog technologies, the semiconductor engines of the Internet age. The company's businesses also include materials and controls, and education technology. TI is headquartered in Dallas, Texas, and has manufacturing or sales operations in more than 25 countries.
Texas Instruments is traded on the New York Stock Exchange under the symbol TXN. The company's web site is www.ti.com.
Dot Wireless develops and markets third generation (3G) wireless technology and products that enable the growing convergence of data and wireless communication services. Dot Wireless's engineering team is made up of internationally recognized leaders in the field of wireless technology. Dot Wireless is a privately held corporation headquartered in San Diego, California. For more information, visit Dot Wireless's web site at www.dotwireless.com.