DP Acquisition makes £103 million offer
DP Acquisition, a wholly owned subsidiary of Motorola formed to implement the potential acquisition of TTPCom, has made a firm offer valuing the company at 45p a share, a 246% premium on its closing price yesterday. TTPCom shares were trading at around 13p prior to the announcement, about half their value at the turn of the year.
With TTPCom’s directors unanimously recommending the offer, it looks as if the Cambridge, UK, based company will be joining Motorola as a strategic asset in its mobile devices division.
TTPCom develops software platforms, protocol stack and semiconductor solutions for mobile devices. Motorola has, of course, spun out its own semicon division as Freescale.
Ron Garriques, president of Motorola’s mobile devices divsion, said, “We already have a strong relationship with TTPCom and look forward tocontinuing the momentum TTPCom has built upwith its customers and partners across the mobile industry.”
That final line of course hints at the fact that TTPCom is a supplier to several Motorola rivals in the device market, including LG, BenQSiemens, Panasonic, RIM and Sharp. TTPCom also supplies technology to semiconductor companies such as Texas Instruments, Intel, Icera and NEC.
But despite that broad portfolio, TTPCom has been struggling.
It has had delays in it own products, and has also seen reductions in the shipments of its customers’ devices.
A company statement said, “The disappointing financial performance resulted from a decline in 2G revenues coinciding with a delay in the growth of 3G and a substantial investment programme to produce the exciting new product AJAR.”
Revenues dipped 36% this year just finished, and license fees and royalties dipped from £44.5 million last year to £27.7 tthis year. The company’s losses increased from around £4 million last year to £25.8 million this.
But the company said that the value of its continuing development in its AJAR applications operating platform and 3G cellular modems had been recognised by Motorola, despite a lack of successful commercial realisation so far.
TTPCom’s subsidiary ip.access had already issued new share capital to an invevstment consortium headed by Scottish Equity Partners, leaving TTPCom with a 47.5% share.