Strategic Acquisition with Digital Power IC Pioneer Powervation to Expand Market Position in Digital Power Solutions
Kyoto, Japan, and Cork, Ireland, (July 23, 2015) – ROHM Co., Ltd., a global leader in analog power IC solutions, announced today that it has completed the acquisition of Powervation Ltd., a privately held digital power IC company that develops Digital Power Management system-on-chip (SoC) solutions for approximately $70M, in an all-cash transaction.
The strategic combination of Powervation’s Intelligent Digital Power™ platform with ROHM’s leading analog power technology and global market access will enable the company to address a broad range of fast growing market opportunities, as customers increasingly adopt digital power solutions to power next generation high density systems and ICs such as Processors, Memory, FPGAs, and ASICs.
Since its founding in Ireland in 2006, as a University of Limerick spin-out, Powervation has established itself as a leading innovator in digital power controllers serving high performance Computing, Cloud and Communications infrastructure markets. The Company’s proprietary DSP control platform with patented xTuneTM auto-tuning and ITMTM intelligent transient management technologies, has been adopted by industry leading customers who need advanced power management, precision telemetry / control and high efficiency solutions to power their complex multi-rail, multi-phase systems. Powervation delivers on these needs with further breakthroughs on design flexibility, fast time-to-market and lower total cost of ownership.
ROHM, a $3B global leader in analog and power semiconductors, supplies a diversified global customer base in the consumer, automotive and industrial markets. By acquiring Powervation, ROHM will gain leading-edge digital power technologies to strengthen its product offerings in the rapidly-growing cloud, data-center, and communications infrastructure markets. This acquisition will also enable ROHM to develop advanced digital power solutions for a broader range of markets and applications with Powervation’s flexible controller platform.
According to market research reports, digital power continues to progressively displace traditional analog technology in the $11B global power management IC market driven by its performance and energy efficiency advantages.
“ROHM and Powervation share a common vision for the role of digital power technology in transforming the market with next-generation high performance power solutions,” stated Mike Smith, SVP & GM of ROHM Semiconductor USA.
“The combination of our two companies will enable ROHM to develop industry-leading, integrated digital power solutions to serve a broad range of customers, markets, and applications spanning the entire spectrum from Computing and Communications to Consumer and Industrial,” stated Jun Iida, head of LSI development and member of the ROHM board of directors.
Powervation will become a fully owned subsidiary of ROHM, with principal design center in Cork, Ireland and system application centers in San Jose, CA and Asia which fuse expertise in power systems, digital control, silicon and embedded software. ROHM plans to accelerate product development through investment and synergies with ROHM analog / discrete power technologies and to increase market adoption further by leveraging ROHM’s global customer base and channels.
“The Powervation team is excited to join forces with ROHM, a top 25 global semiconductor company,” said Mike McAuliffe, CEO of Powervation. “It’s simply a great fit – we have built an innovative Digital Power IC company to date but the combination with ROHM now presents a compelling opportunity for broad market leadership in Digital Power Management solutions.”
Q&A regarding Acquisition
What circumstances lead to Rohm’s decision to acquire Powervation?
We are always looking to expand our product lineup in our strongest area, the power supply segment.
We had the opportunity to enter into acquisition discussions with Powervation, a company that owns unique proprietary technologies and growing rapidly in the digital power market.
We decided to proceed with the transaction in belief that we will be able to provide our customers with innovative solutions by combining Powervation’s digital technologies with Rohm’s analog and device technologies and sales network.
We would like to refrain from discussing the specifics of this transaction including time related matters.
What is the goal of this acquisition?
The goal of this acquisition is to expand our capability to provide solutions with power LSIs and bolster competitiveness.
Were other companies competing to acquire Powervation?
We would like to refrain from making any comments on the specifics of the transaction.
What kind of relationship did Rohm have with Powervation prior to this deal?
Rohm did not have any business relationships with Powervation prior to this deal.
How much revenue and profits does Rohm anticipate for this deal to generate?
We intend to fully capitalize on our sales network, convey to our customers the outstanding capabilities of Powervation’s solutions, and in the near future develop a business that generates over 10B JPY annually.
Will Powervation’s products be sold under the Rohm brand?
We plan to sell Powervation’s products under the Rohm brand. We would like for it to be considered as Rohm’s new product line.
Will Rohm be producing Powervation’s products?
Powervation is currently outsourcing production to best in class foundry partners.
We will not change the production process for products that are currently being manufactured in order to prevent confusion amongst our customers.
We believe that we will be able to better satisfy our customers by conducting manufacturing in our advanced production systems and intend to take production in-house in the near future.”
What will happen to Powervation’s business operations?
Powervation will become a wholly owned subsidiary.
We will develop on Powervation’s business putting its current business at the core and will also integrate it into Rohm’s global operations.”
How many of Powervation’s management and employees remain? What are the plans for the employees?
We plan for all of Powervation’s management and employees to stay with the company.
In general, we do not plan changes to the employment terms.
How are Powervation’s employees receiving the transaction?
Powervation’s employees are excited to jointly developing the business.
Powervation has done an excellent job with developing their technologies to a highly advanced degree, successfully releasing products, and cultivating customers with a small team.
All of the team members understand that it is in the best interest of Powervation to tie up with a company that has the scale and brand recognition as Rohm so as to take the company to the next level of growth.
Everyone is excited about the opportunities for growth that can be captured by working together.”
Are there plans to restructure Powervation’s business?
We have no plans for any headcount reductions.
We will merge and strengthen product development and sales operations with Rohm.”
How are Powervation’s financials?
Powervation’s revenue and profits are not publicized information.
An increasing number of customers are purchasing Powervation’s solutions and we anticipate high growth going forward.
What kinds of applications are Powervation’s products used in?
A significant quantity of Powervation’s products are used in data centers and base stations, which are areas where the ICs are able to fully exert and make use of its highly precise power control and digital control abilities.
Powervation provides solutions that enable highly flexible and quick time-to-market power designs, as well as provide the capability to remotely monitor power operations.
Furthermore, Powervation’s proprietary Auto-Tuning technology enables power ICs to consistently maintain precise power outflow even when there are changes to the chip’s exterior environment.
These technologies can create value in a wide breadth of applications and markets. Everyone can have confidence and high hopes in what we will be delivering in the future.”
Where are the locations and what are the scales of Powervation’s development and sales centers?
Development is primarily conducted in Ireland with a smaller team in the United States.
Sales operations are conducted from offices in the United States, Taiwan, and China.
How would you describe Powervation’s management?
Each of Powervation’s management have left distinguished results in the power IC field and we intend to maintain the team.