Acquisition

Filtronic PLC 23 August 2000 FILTRONIC PLC: $US 20M ACQUISITION OF SIGTEK INC. Purchase of US Digital Signal Processing ('DSP') software group Innovative earn-out based on engineering skills Filtronic plc, a leading global player supplying the mobile infrastructure markets, whose customers include Nokia, Motorola, Ericsson, Philips and Lucent, announces the acquisition of Sigtek Inc, based in Maryland, USA for a maximum consideration of $20m. Sigtek is a leader in the field of high speed digital signal processing ('DSP') software development, and of its 30 employees, 23 are professional engineers. The consideration, payable over a 4 year period is to be satisfied by the issue of up to 1,140,901 new Filtronic shares with an initial payment of 267,427 new shares at 1177p per share. In an innovative agreement, the deferred consideration element is subject to earn-out criteria dependent upon both the number and quality of the engineers retained by Sigtek over a four year period. High speed DSP is integral to the development of software radio which is applicable to most of the business areas currently addressed by Filtronic. The technology has only recently been developed in response to the need to progress high frequency signals in real time which has been driven by requirements for third generation ('3G') mobile phones and optical fibre networks. Several projects will be established during the coming months to utilise this additional DSP capability, and it is applicable both in base station and mobile phone applications. In base stations the high frequency transmit/receiver modules are likely to include up and down conversion capability and inevitably interface with the remainder of the system at digital level. For high performance 3G handsets, digital techniques will be developed to minimise distortion and maximise radiation in the most efficient manner whilst providing enhanced receive capability with dynamic diversity. Both of the above will be necessary to utilise the 2MBs high data rate standard and can only be accomplished using high speed DSP. Initially, Sigtek Inc will form part of Filtronic's Broadband Access group with immediate applications within the broadband two-way cable systems in the USA, where digital/radio frequency converters are necessary to provide the 70 million subscribers with high speed services. These products are customised for installation in OEM platforms and the Filtronic/Sigtek combination is well positioned to develop these products with their current US OEM customer base. Higher bandwidth wireless systems will use complex digital modulation schemes and again the Filtronic/Sigtek combination will provide the total expertise necessary to address this rapidly expanding market. Commenting on the acquisition, Professor David Rhodes, Chairman of Filtronic, said: 'Sigtek brings to Filtronic the expertise to develop real-time software for high frequency DSP. This acquisition, together with the new compound semiconductor products to be produced at our Newton Aycliffe facility will place Filtronic in a strong position to meet the challenges in our rapidly expanding markets.' Enquiries: Professor David Rhodes Professor Chris Snowden Chris Schofield Filtronic plc Tel: 01274 530622 Paul Vann Binns & Co Tel: 020 7786 9600

Companies

Filtronic (FTC)
UK 100

Latest directors dealings