Californian touch screen chip maker, Synaptics, announced today it had signed an agreement to acquire Apple's sole display chip supplier, Renesas SP Drivers, for US$475 million.
The deal follows failed talks last month between Apple and Renesas SP Drivers' Japanese parent company, Renesas Electronics, for the iPhone maker to acquire its chip supplier, according to a Reuters report.
"The acquisition of Renesas SP Drivers unites complementary and best-in-class technologies and brings on board a very experienced, highly skilled engineering team, strengthening Synaptics' position as the number one touchscreen controller supplier to the mobile display market, with unmatched platform level technologies," said Rick Bergman, president and CEO, Synaptics.
"Upon closing the acquisition, we will have the scale to accelerate our technology roadmap and expand our broad portfolio of human interface product families including display integration solutions," he said.
Synaptics, whose chips are used in Samsung mobile devices, intends to integrate its touch technology with Renesas' display technology into one chip in order to save on manufacturing costs.
According to Ikuo Kudo, president and CEO of Renesas SP Drivers, the deal will allow the two companies to combine their technical know-how and advance display and screen innovation.
"The combination of Synaptics and Renesas SP Drivers forms an even stronger market leader with a highly complementary combination of products and technologies," said Kudo. "The well-matched technologies and enhanced scale will drive further innovations in mobile display."
Synaptics said that its purchase of Renesas SP Drivers is expected to create "significant revenue and investment scale to drive future growth and operating leverage".
The acquisition is expected to close in the fourth calendar quarter of 2014, subject to customary closing conditions and regulatory reviews.
Synaptics intends to fund the transaction with cash and committed debt financing of US$300 million.
Synaptics also revealed its fourth-quarter fiancial guidance today, saying it expects to report record revenue in the range of US$300.0 million to US$310.0 million, up from its previous guidance of US$275.0 million to US$295.0 million and representing an increase of 30 percent to 35 percent over the prior year period.