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EZchip Semiconductor announced on November 6, 2014, that it had completed its acquisition of Tilera Corporation. The deal closed the previous day, November 5. EZchip acquired Tilera’s business in multicore processors, intelligent network interface cards and data-center networking appliances—not just a single chip company’s product line.
When did EZchip acquire Tilera?
EZchip’s announcement was dated November 6, 2014, while its 2014 annual report identifies November 5 as the “Tilera acquisition date.” In other words, the transaction closed on November 5 and was announced publicly the next day.
The transaction was structured as a merger: a newly formed EZchip subsidiary merged into Tilera. Tilera survived as a wholly owned subsidiary of EZchip Inc. and was renamed EZchip Semiconductor Inc. EZchip’s 2014 annual report describes the structure and closing date.
What did EZchip acquire?
Tilera was a privately held U.S. company developing high-performance multicore processors, intelligent network interface cards and white-box appliances for data-center networking. Those product categories are identified in both EZchip’s acquisition announcement and its annual report.
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The deal therefore expanded EZchip’s reach from its existing networking business into complementary processor and data-center networking products. The available company disclosures establish what Tilera made and EZchip’s stated strategic aims; they do not establish that particular products remained on sale or that integration produced a specific market result.
What were the purchase price and other deal terms?
The two disclosed closing figures differ in basis and disclosure stage, so they should not be treated as interchangeable.
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| Disclosure | Closing consideration | Potential additional consideration |
|---|---|---|
| EZchip announcement, November 6, 2014 | $50 million in aggregate cash paid at closing, subject to working-capital and other adjustments. | Up to $80 million for Tilera stockholders if future performance milestones were met. |
| EZchip 2014 annual report, filed in 2015 | $45.469 million in closing consideration, including working-capital adjustments, on a debt-free and cash-free basis. | Up to $80 million contingent on revenue milestones through December 2015. |
The announcement’s $50 million figure was the stated cash purchase price, subject to adjustments. The later annual-report figure reflects the reported consideration on a specified debt-free and cash-free basis. The annual report states the amounts in thousands of dollars. It does not establish here whether any contingent milestone payments were ultimately made. See the announcement and annual report.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Why did EZchip say it bought Tilera?
EZchip said the acquisition was intended to create growth opportunities by accelerating expansion into new markets, diversifying its customer base and product lines, and doubling its target total available market. Those are the buyer’s stated intentions and forecast, not proof that the outcomes occurred.
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Repair Windows errors before they cause bigger problemsFix Now →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Clear out junk files and repair common Windows errorsFree Scan →For financial context, EZchip’s fourth-quarter and full-year 2014 results, filed in February 2015, reported $11.5 million in 2014 expenses related to the Tilera acquisition. That figure is an acquisition-related expense, not the purchase price. The release also listed integration of Tilera’s business among factors that could affect company results; neither disclosure alone establishes whether the acquisition ultimately succeeded or failed.
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