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| Key Asic acquires Taiwanese chip designer |
| Written by Financial Daily | |||
| Wednesday, 19 August 2009 11:22 | |||
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In an announcement to Bursa Malaysia yesterday, Key Asic entered into a sale and purchase agreement with Macronix International Co Ltd (MXIC) to acquire 89.91% of Gateway Silicon Inc (GSI) for RM16.2 million (NT$151 million). According to the announcement, the purchase consideration was arrived at on a willing-buyer-willing-seller basis after taking into account the audited net assets of GSI of NT$38.70 million (RM4.2 million) as at April 30, 2009 and also the subsequent share subscriptions by MXIC amounting to NT$97.5 million after the date. GSI recorded losses in the financial years ended December 2005, 2006 and 2007. But Key Asic said that the proposed acquisition would enhance Key Asic presence in Taiwan which is crucial for its expansion plan. “Furthermore, Key Asic will have instant access to GSI’s intellectual property (IP) and its customers base which do not overlap with the existing customers of Key Asic. The board is of the view that the proposed acquisition will benefit Key Asic in the near future in enhancing its competitiveness and design capabilities,” the company said in its announcement. The proposed acquisition confirms a report in The Edge Financial Daily last week which stated that Key Asic was close to acquiring a Taiwanese company, which would mark the company’s foray outside Malaysia. GSI is principally engaged in engineering design services and over the years has accumulated a vast IP library either developed in-house or licensed from third party. Among downside risks is that although Key Asic has carried out a reasonable technical and legal due diligence on the IP ownership, there will be no assurance from the vendors that the existing IP of GSI does not infringe on any third party’s rights. The transaction will be paid for in cash. Key Asic is reported to have cash close to RM100 million and no borrowings. This article appeared in The Edge Financial Daily, August 19, 2009.
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