Exar Snaps Up Semiconductor Designer Cadeka Microcircuits for $29M

Semiconductor products designer and manufacturer Cadeka Microcircuits has been purchased by Exar for $29 million in a cash and stock deal, the companies announced Monday. The acquisition price could go up because the deal includes earn-out provisions based on the net revenue Cadeka products generate for Exar.

Cadeka makes precision analog integrated circuits and is based in Loveland, CO, a city between Boulder and Fort Collins. The company’s headquarters and chip design and test facility are in Loveland and are home to about 16 employees, Exar CEO Louis DiNardo said. They will remain in Colorado, and Exar plans to incrementally add to the local staff.

Cadeka also has operations in the Chinese cities of Shenzhen and Wuxi and has about 32 total employees, DiNardo said. In the past year Cadeka added more employees in Colorado, opened the Wuxi facility, and expanded international sales.

According to Cadeka’s single SEC filing, the company raised $650,000 in 2007. The company was incorporated in 2003.

Fremont, CA-based Exar (NASDAQ: EXAR) bought Cadeka because it wants to strengthen its presence in the high performance analog and mixed-signal market and wanted Cadeka’s design and development teams, DiNardo said. Cadeka’s strengths are in products such as amplifiers and data converters that are used in medical electronics, testing and measurement instruments, and surveillance and security equipment.

The deal closed Friday, but the companies were in talks for the past six months, according to DiNardo.

Exar reported revenue of $122 million and a $2.2 million profit in its most recent fiscal year, which ended March 31. Its fortunes have been improving over the past year, following a $28.1 million loss in FY 2012 and a $35 million loss the year before. As of April, it had 291 employees, according to its annual report.

Cadeka president and CEO Gary Ross will join Exar and become a vice president and general manager of high performance analog products.

Cadeka a relatively low profile but substantial history as part of Colorado’s semiconductor industry. Many of Cadeka’s employees worked at Comlinear, a circuit designer that was based in Fort Collins before National Semiconductor acquired it in 1994. Intel has a microprocessor design center in Fort Collins. Several other semiconductor companies have facilities a few hours south in Colorado Springs.

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