MaxLinear to Acquire Entropic

MaxLinear, Inc.,a leading provider of integrated radio frequency (“RF”) and mixed-signal integrated circuits (“ICs”), and Entropic Communications, Inc., a world leader in semiconductor solutions for the connected home, announced that they have signed a definitive agreement for MaxLinear to acquire Entropic. The boards of directors of both MaxLinear and Entropic have unanimously approved the transaction.

Entropic shareholders will receive (i) $1.20 per share in cash and (ii) 0.2200 shares of MaxLinear common stock for each Entropic common share outstanding. Based on MaxLinear’s closing stock price on February 2, 2015, the merger consideration is valued at approximately $3.01 per Entropic share. The implied total transaction value is approximately $287 million and the implied enterprise value is $181 million, net of Entropic’s cash balance as of December 31, 2014. Shareholders of MaxLinear and Entropic will own approximately 65% and 35%, respectively, post completion of the acquisition.

Headquartered in San Diego, Entropic is recognized for pioneering the MoCA® (Multimedia over Coax Alliance) home networking standard, inventing Direct Broadcast Satellite (“DBS”) outdoor unit single-wire technology, and developing the industry’s first set-top box SoC platform based on the ARM® processor with advanced OpenGL graphics. Entropic has a rich history of innovation and deep expertise in RF, analog/mixed signal and digital signal processing technologies. Entropic’s silicon solutions have been broadly deployed across major cable, satellite, and fiber service providers.

The acquisition will add significant scale to MaxLinear’s analog/mixed-signal business, expanding its addressable market and enhancing the strategic value of MaxLinear’s offerings to its broadband and access partners, OEM customers, and service providers. MaxLinear sees immediate cross-selling opportunities and longer-term platform integration opportunities with Entropic’s leading MoCA technology.

Along with broadening MaxLinear’s presence in its existing markets, Entropic adds immediate scale and deep customer relationships in MaxLinear’s most recent growth area of the satellite Pay-TV market. Entropic’s design talents and portfolio of approximately 1,500 issued and pending patents are highly complementary, and MaxLinear is uniquely positioned to capitalize on these assets.

“We are very excited about the opportunity to bring together two talented and largely complementary teams, as we increase our capabilities to solve the most difficult analog and mixed-signal RF challenges in Broadband markets,” said Dr. Kishore Seendripu, CEO of MaxLinear. “We believe the scale and strategic benefits of a broader technology portfolio will enable us to accelerate our expansion into new markets more effectively. The financial benefits of the transaction should be immediately visible, as we expect non-GAAP earnings accretion in the first full quarter post-close.” 

Dr. Ted Tewksbury, Interim President and CEO of Entropic, commented, “I share Kishore’s enthusiasm for this combination, which we believe maximizes value for Entropic’s shareholders, employees and customers. These are two excellent companies in the industry, and I believe our stakeholders will benefit from the resources and scale that the combination will provide.”

Other Transaction and Financial Details

As a result of the combination, MaxLinear anticipates it will achieve operating synergies in excess of $20 million in the first full calendar year post-close. Increased scale and projected cost savings are expected to lower combined non-GAAP operating expenses, generate significant operating margin expansion, and accelerate MaxLinear’s timing to achieving its stated target operating model. 

The transaction is expected to close in the second quarter of 2015 subject to approval by the shareholders of both companies, the receipt of regulatory approvals, and other customary closing conditions. MaxLinear will add Dr. Ted Tewksbury to its board of directors upon closing of the transaction. 

Stifel is acting as exclusive financial advisor to MaxLinear. Barclays is acting as exclusive financial advisor to Entropic. Wilson Sonsini Goodrich & Rosati, P.C. is acting as counsel for MaxLinear and Cooley LLP is acting as counsel for Entropic.

MaxLinear Reaffirms Fourth Quarter 2014 Guidance

MaxLinear’s fourth quarter 2014 revenue is expected to be in the range of $32 million to $33 million. This is unchanged from the Maxlinear’s previous guidance.

MaxLinear is reaffirming its prior GAAP and non-GAAP gross margin and operating expense guidance. 

MaxLinear’s cash, cash equivalents and investments are expected to be $79 million as of December 31, 2014.

As previously announced, MaxLinear is scheduled to release its fourth quarter results on February 9, 2015 and will host a conference call that day to discuss those results. 

MaxLinear Provides First Quarter 2015 Guidance

Revenue is expected to be between $34 million and $35 million for the first quarter of 2015.

GAAP and Non-GAAP gross margin is expected to be approximately 61% for the first quarter of 2015. 

GAAP operating expenses for the first quarter of 2015 are expected to be $27.5 million. Non-GAAP operating expenses are expected to be $18.5 million for the first quarter of 2015. For the reconciliation, please see the table at the end of this release.

Conference Call / Webcast Details

MaxLinear and Entropic management will host a conference call at 2:00 p.m. Pacific / 5:00 p.m. Eastern to discuss today’s announcement. Supporting materials for the conference call, including a presentation, will be available on the Investor Relations sections of MaxLinear’s and Entropic’s websites at, respectively.

Interested parties may access the conference call via any of the following:

Teleconference: 1-888-337-8198 / International:1-719-325-2402 

Access Code: 3138635

Web Broadcast: 

Replay: 1-888-203-1112 / International:1-719-457-0820 

Replay Passcode: 3138635

A live webcast of the conference call will be accessible from the investor relations section of the MaxLinear website at, and will be archived and available after the call at A replay of the conference call will also be available.