Dialog Semiconductor announced a new deal with Apple securing revenues from the key customer over the next three years, while also transferring certain assets and around 300 employees to Apple. Apple will pay USD 300 million in cash for the transaction and prepay USD 300 million for Dialog products to be delivered over the next three years.
Dialog said the employees who are being transferred have worked closely with Apple for many years, and this transition will foster deeper collaboration between the two companies.
The new contracts from Apple cover the development and supply of power management, audio subsystem, charging and other mixed-signal integrated circuits. Revenue from the new contracts is expected to be realized starting in 2019 and accelerating in 2020 and 2021.
Dialog said it will continue to deliver power management ICs to other companies in future. At the same time, the company plans to accelerate its transformation to become a more differentiated supplier of mixed-signal ICs across a broader customer base, targeting fast-growing segments of the IoT, mobile, automotive and computing & storage markets.
The agreement with Apple provides the financial flexibility to pursue the new strategy, including M&A opportunities. The company will also start a programme to buy back up to 10 percent of its shares after its Q3 trading update.
The transfer of employees to Apple represents around 16 percent of Dialog’s total workforce. In addition, Apple will take over certain Dialog facilities in Livorno (Italy), Swindon (UK), Nabern and Neuaubing (Germany).
The transaction is expected to be completed in the first half of 2019, subject to regulatory approvals.
