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NVIDA announces USD 52 million acquisition deal

NVIDA Corporation has announced the signing of a definitive agreement for the acquisition of ULi Electronics, a leading developer of core logic technologies and current partner of rival chip manufacturer, ATI.

NVIDIA Corporation has announced the signing of a definitive agreement for the acquisition of ULi Electronics, a leading developer of core logic technologies and current partner of rival chip manufacturer, ATI.

The move is designed to bolster NVIDIA's ongoing investment in its platform solution strategy, specifically the firm's acclaimed NVIDIA nForce media and communications processors, NVIDIA GeForce and NVIDIA Quadro graphics processing units. It is hoped that the acquisition will also serve to strengthen NVIDIA's relationships in sales, marketing and engineering, increasing its market presence and consumer share in the Chinese and Taiwanese markets.

The agreement remains subject to satisfactory compliance of regulatory requirements and customary closing conditions, and is expected to be finalised in the first quarter of the company's 2007 fiscal year. Under the terms of the agreement, ULi president and CEO, Alex Kuo, will join NVIDIA as a senior executive responsible for MCP sales, marketing, and support functions in Asia.

Jen-Hsun Huang, president and CEO, NVIDIA, stated: "Alex and his team have built a company admired for creating innovative products in the core logic arena. The acquisition provides an opportunity for NVIDIA to leverage a very talented engineering team in order to expand our MCP initiatives while building closer relationships with customers in Asia."

"At ULi, we have always believed that the opportunities in the MCP space are tremendous," added Mr. Kuo. "The strength of the NVIDIA world-class engineering and marketing organizations will enable the ULi team to take product design and development to the next level."

NVIDIA has agreed to pay TWD 19 in cash for each outstanding ULi share and stock option, for a total of approximately USD 52 million. The company intends to supply ULi customers with current products for the foreseeable future.

ULi works with a number of partners around the world, including NVIDIA's market rival ATI. ULi currently supplies a range of Southbridge chipsets - key components in the creation of motherboards - which support ATI technologies such as the dual graphics card system, Crossfire. ATI's own Southbridge solution is outdated, and a new update isn't expected for some time - leaving the firm in a tough situation if ULi's chipsets stop supporting its features.

As well as being a leader in the graphics chipset space, NVIDIA is currently the largest supplier of AMD motherboard chipsets in the world. The company has enjoyed consistent and continued growth, posting record revenue for five consecutive quarters and achieving 100 per cent year-on-year revenue growth for its NVIDIA nForce MCP technology.

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Paul Loughrey

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