Aug 22, 2001
Cypress, San Jose, said it will pay $45 million in cash and assumed options, with provisions for additional employee performance bonuses. ISD posted sales of approximately $42 million in 2000 and is expected to contribute as much as $8 million in revenue to Cypress during the fourth quarter of 2001, according to Cypress.
The acquisition is scheduled to close in September and is expected to be accretive to Cypress earnings starting in the fourth quarter. Cypress said that an important product resulting from the purchase will be the ISD-300A, a USB 2.0-to-ATA/ATAPI bridge device that enables PCs and other information appliances to connect to external mass storage devices.
�Clearly we've been going after USB-On-The-Go and the embedded market space,� said Cathal Phelan, vice president of Cypress' Interface Products Division, the company's division that will include ISD. �In USB 2.0 we've have also been chasing the mass storage space, which we think will be one of the first to explode. It's one reason ISD is such a good purchase for Cypress.�
Phelan said the two companies had been exploring the possible agreement for the past four to five weeks.
�This seemed like such a good match, we had to go with it,� said ISD founder and CEO Lynn Watson. Founded in 1994 by a team of engineers, the company was at a point where it needed to go beyond the fabless model to compete and grow, said Watson.
�I think Cypress is really carving out that USB area as an area they really want to succeed in,� said Bob Merritt, an analyst with Semico Research Corp., Phoenix, Ariz. �What Cypress has done so far with acquisitions, it looks like they have all worked out very well for them.�
In June, Cypress announced plans to pay $225 million --- mostly in cash -- for Lara Networks Inc, a privately held company specializing in packet processing products for WAN infrastructure equipment. The Lara purchase marked Cypress' 12th acquisition in less than 3 years.
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