Alphawave IP Announces Definitive Agreement to Acquire Entire OpenFive Business Unit from SiFive for US$210m in cash
PR94958
LONDON, TORONTO and SAN MATEO, Calif., March 14, 2022 /PRNewswire=KYODO JBN/ --
- Transaction will accelerate Alphawave's connectivity leadership, product
offerings and customer base while driving higher scale and revenue growth from
an expanded total addressable market
Alphawave IP Group plc ("Alphawave" or "Company") (LN: AWE), a global leader in
high-speed connectivity for the world's technology infrastructure is pleased to
announce the acquisition of the entire OpenFive business unit from SiFive Inc.
("SiFive"). SiFive is the founder and leader of RISC-V computing based in San
Mateo, California. All definitive agreements have been completed and the
transaction is expected to close in H2 2022 pending customary regulatory
approvals.
Logo -
Key highlights
Alphawave has agreed to acquire OpenFive, a SiFive business unit, bringing
OpenFive's high-speed connectivity system-on-chip (SoC) IP portfolio and a
proven team based in India and Silicon Valley that has been delivering custom
silicon solutions for over 15 years. The acquisition significantly increases
Alphawave's customer base globally from 20 currently to over 75, especially in
North America, and adds an additional hyperscaler customer based in North
America.
-- This acquisition will nearly double the number of connectivity-focused
IPs available to Alphawave customers from 80 to over 155 and will
provide customers with a one-stop-shop for their bundled connectivity
needs in the most advanced technologies at 5nm, 4nm, 3nm and beyond.
This will include an expanded die-to-die connectivity portfolio that
will accelerate chiplet delivery capabilities to customers.
Alphawave has also licensed RISC-V processor IPs from SiFive as part
of the transaction.
-- OpenFive's proven silicon development team enables Alphawave to offer
leading edge data centre and networking custom silicon solutions as
well as enhancing its chiplet design capabilities. This accelerates
Alphawave's strategic goal to scale revenues by monetising its leading
connectivity IP not only through IP licensing but advanced custom
silicon design.
-- The combination of Alphawave's leading high-speed connectivity with
OpenFive's IP portfolio is expected to generate material revenue
synergies through bundling of IP and integrated IP sub-systems as well
as leveraging the two companies' respective strengths to win complex
custom silicon design wins at leading edge process nodes.
-- The transaction will be immediately EPS accretive to Alphawave.
Forecast FY 2023 revenue for the combined group is anticipated to
reach between US$325m to US$360m with a path to a yearly revenue run
rate of over US$500m in 2024. 2023 adjusted EBITDA margins for the
group are expected to be between 32-36% with 2025 adjusted EBITDA
margins between 40-45% as revenues exceed US$500m.
Background to the transaction
The Alphawave and OpenFive teams have worked together for over a decade. Over
the last two decades, OpenFive has developed a broad and deep capability for
the delivery of high-end SoC IP technologies to both RISC-V and ARM-based
customers. Historically, the OpenFive team has successfully delivered to over
280 customers globally in some of the most advanced process technologies. Over
70 of these customers are pure IP customers. Their extensive custom silicon
know-how has established OpenFive as a leading provider of custom silicon
solutions globally and with a strong focus on the North American market. As
part of the acquisition, Alphawave will be acquiring a 300+ person team,
primarily in India, which will significantly expand Alphawave's delivery
capabilities.
This transaction has been signed at an inflection point in the semiconductor
industry, as the importance and adoption of RISC-V technology has grown
significantly in recent years. Against this backdrop, SiFive will continue to
focus on its highly successful RISC-V business. As part of the transaction,
Alphawave will also become a licensee of RISC-V processor technology and will
continue to work with SiFive on opportunities for RISC-V collaboration,
particularly in North America.
Strategic rationale
The acquisition of OpenFive will accelerate Alphawave's existing high-growth
and successful connectivity business in three ways.
Nearly doubles the total number of IPs available and accelerates the Alphawave
roadmap
The acquisition will significantly expand Alphawave's total number of
connectivity and SoC IPs, providing a comprehensive portfolio for customers'
entire high-end connectivity needs. The acquisition will also accelerate
Alphawave's existing industry-leading roadmap for advanced connectivity
solutions in 4nm, 3nm and beyond. Alphawave is already the global connectivity
leader with over 80 IPs offered in the most advanced process technologies.
With the acquisition of OpenFive, this portfolio of IPs will nearly double to
over 155 IPs. These IPs can then be bundled to expand the design penetration
and stickiness of Alphawave IPs into key new and existing customers globally,
primarily in the North American market.
Accelerates Alphawave's capability to deliver custom silicon solutions for
connectivity, including chiplets
The adoption of chiplets by the semiconductor industry is rapidly expanding the
total addressable market for Alphawave's technology and driving design wins
faster than expected. This trend was first reported in the Company's Q4 2021
trading update, where the Company announced chiplet design wins ahead of
expectations. This was also reinforced by the recent announcement from the
UCIe consortium. By adding capabilities to deliver custom silicon, including
chiplets, Alphawave will be a leading provider of connectivity solutions
globally, as the only pure-play provider of connectivity solutions in both IP
and silicon form-factors to the most sophisticated customers globally including
hyperscalers and major semiconductor companies. Alphawave already has deep and
broad experience with many of these customers today.
Expands the customer base and total addressable market – especially with North
American customers – and adds a new North American hyperscaler to Alphawave's
customer base
The acquisition of OpenFive will significantly increase the total Alphawave
global customer base from 20 to over 75. This will provide a broader platform
from which Alphawave can continue to execute its successful "land and expand"
sales strategy. More importantly, the acquisition will add significant key
customers in North America including a new hyperscaler customer in North
America. The acquisition also positions Alphawave to become a leading provider
of high-performance connectivity-focused custom silicon, a market that is
estimated to exceed $20 billion by 2026[1].
Transaction Details, Financing & Financial Effects
The total consideration payable by Alphawave is US$210m in cash, funded from
existing cash resources, and the transaction is subject to customary closing
conditions and regulatory approvals. Post-acquisition, Alphawave will continue
to have significant capacity to invest in further growth opportunities across
the enlarged group. Post-closing the OpenFive team will receive customary
retention incentives. The transaction is expected to close in H2 2022 and will
contribute significant revenues and profit immediately after closing.
Key transaction details are as follows:
-- Acquisition is expected to be immediately accretive to EPS
-- Total IPs available to customers will increase from 80 to over 155
-- Total number of customers globally will increase from 20[2] to over 75
-- Alphawave revenues in 2023 are expected to increase to between US$325m
and US$360m with a run rate to over US$500m in 2024. This growth is
expected to continue in the mid-term
-- 2023 adjusted EBITDA margins for the group are expected to be between
32-36% with 2025 adjusted EBITDA margins between 40-45% as revenues
exceed US$500m.
-- High levels of profitability will continue with significant growth
expected beyond 2024
John Lofton Holt, Executive Chairman of Alphawave stated: "When we completed
our IPO in 2021, we committed to continuing to grow and accelerate our business
by deploying the capital we raised. This began with the acquisition of
Precise-ITC in 2021, and the addition of the OpenFive team will further
accelerate Alphawave's business. Alphawave can now deliver bundled
connectivity-focused IP solutions and custom silicon solutions like chiplets to
global customers. This will enable a scale and top-line growth that we
envisioned, but much faster than we expected, while continuing to deliver high
growth and profit margins for years to come."
Tony Pialis, President and Chief Executive Officer of Alphawave stated: "We
have known and worked with the OpenFive team for many years as they have
established their credibility in delivering leading-edge SoC IP and custom
silicon solutions in the world's most advanced technology, and to the world's
most advanced customers. This acquisition is important for Alphawave, but also
for our industry, as we will now be the leading pure-play provider of
connectivity solutions in the world in whatever form-factor our customers need
it – as silicon IP or in custom silicon solutions like chiplets. As we look to
the future, we expect to develop and acquire additional capabilities to further
expand and accelerate our leadership in connectivity. In our core business,
the first quarter of 2022 is very strong and the outlook for 2022 is also
strong. We expect this transaction to meaningfully impact revenues in H2 2022,
pending regulatory approval of the transaction."
Patrick Little, Chairman and CEO of SiFive stated: "It has been a pleasure
working with the Alphawave team on this transaction, and I am sure that we will
continue to work together as SiFive focuses on its core RISC-V business. We
were also pleased that Alphawave licensed SiFive's RISC-V processor IP as part
of the transaction, which further demonstrates the importance of SiFive RISC-V
technology to high-end customers globally in a variety of end markets."
Webcast and Conference Call Information for Investors and Media
The Company will host a webcast, conference call and Q&A session on March 14,
2022 at 1600GMT. Details of this call will be posted on the Company website.
Related Party Disclosures
SiFive and OpenFive are not related parties of Alphawave.
Trademarks
All registered trademarks and other trademarks belong to their respective
owners.
About Alphawave IP Group plc (LSE:AWE)
Faced with the exponential growth of data, Alphawave IP's technology services a
critical need: enabling data to travel faster, more reliably and with higher
performance at lower power. Alphawave IP is a global leader in high-speed
connectivity for the world's technology infrastructure. Our IP solutions
therefore meet the needs of global tier-one customers in data centers, compute,
networking, AI, 5G, autonomous vehicles, and storage. Founded in Toronto,
Canada in 2017, by an expert technical team with a proven track record in
licensing semiconductor IP, our mission is to focus on the hardest-to-solve
connectivity challenges. To find out more about Alphawave IP, visit:
awaveip.com (
)
Glossary
IP / Silicon IP Intellectual property core, IP core or IP block is a reusable
building block of a semiconductor chip that can be licensed
or purchased from a third-party provider. Some examples of
third-party providers are Alphawave IP, ARM and Imagination
Technologies.
Bookings Is the total value of licence fees, non-recurring engineering
fees (NRE) and support and maintenance contractually
committed by customers together with an estimate of expected
royalties from those contracts (unless stated otherwise).
Bookings are stated since Alphawave IP's founding (referred
to as cumulative or lifetime bookings) or in a given period.
Hyperscaler Hyperscalers are technology companies that provide cloud,
networking and internet services at scale. Some examples of
hyperscalers include Google, Facebook, Baidu, Alibaba,
Microsoft, and Amazon.
Foundry Also commonly known as a 'fab' or wafer fabrication facility,
a semiconductor foundry is a manufacturer of semiconductors
for other companies. The two largest foundries in the world
are TSMC and Samsung.
End customer Alphawave IP's end customers include semiconductor OEMs,
ASIC providers, and hyperscalers. These are companies that
provide and build technology infrastructure, from data
centres, networking, and storage to AI, autonomous vehicles
and 5G wireless.
OEM Original equipment manufacturer that produces systems, parts
or equipment utilised in the production of another device or
product.
___________________________
[1]
[2] As of end of FY 2021, not including VeriSilicon, which is a reseller
Alphawave IP Group plc: John Lofton Holt, Executive Chairman, Daniel Aharoni,
CFO, ir@awaveip.com, +44 (0) 20 7717 5877; Brunswick Group: Simone Selzer,
Sarah West, alphawave@brunswickgroup.com, +44 (0) 20 7404 5959; Gravitate PR:
Anna Bolender, Wynton Yu, alphawave@gravitatepr.com, +1 415 528 0468
SOURCE Alphawave IP
本プレスリリースは発表元が入力した原稿をそのまま掲載しております。また、プレスリリースへのお問い合わせは発表元に直接お願いいたします。
このプレスリリースには、報道機関向けの情報があります。
プレス会員登録を行うと、広報担当者の連絡先や、イベント・記者会見の情報など、報道機関だけに公開する情報が閲覧できるようになります。
