Another GPS Chip Merger: NXP to Acquire GloNav

European chip maker NXP Semiconductors plans to acquire U.S.-based fabless GPS chip maker GloNav Inc., the companies announced today.

NXP will purchase the company for $85 million in cash plus up to $25 million more, contingent upon GloNav reaching certain revenue and product development milestones over the next two years. The transaction will give NXP immediate access to GloNav’s GPS products and technology, including its single-chip and 90nm design capability, the company said. It expects the deal to close in Q1 2008.

“This is the second major acquisition that we have made this year to strengthen our Mobile and Personal Business Unit that quickly adds complementary technologies to our existing portfolio and meets our customers’ demands for innovative products,” said Frans van Houten, NXP CEO. “We are a leader in cellular system solutions. Combining GloNav’s GPS expertise with NXP’s FM Radio, Bluetooth, USB and NFC leadership, enables us to offer a broader connectivity suite to the mobile phone market.

“We already turned the cell phone into a multimedia wallet,” he continued. “It’s only natural that we also want to use our mobile phones to navigate and to find local goods and services. GPS integration allows us to create these and many more interesting and dynamic features, continuously enriching the cell phone in our pocket.”

GloNav has approximately 50 employees and contractors at locations in the United States, United Kingdom, Ireland and Taiwan. It will join NXP’s Mobile and Personal Business Unit.

With the merger pending, GloNav investor Ceva Inc. said that it will divest its ownership stake in the company. European private equity firm Atlantic Bridge Venture created GloNav in 2006 through the divestment of Ceva’s GPS technology and product lines and a merger with California-based RFDomus Inc. Ceva’s ownership in GloNav is 19.9 percent on a fully diluted basis.

The value of Ceva’s shareholding in GloNav, based on its ownership percentage and the acquisition purchase price, is approximately $17 million, more than four times the recorded value of approximately $4 million for the GloNav investment as accounted in in Ceva’s financial statements. “Today’s announcement that NXP Semiconductors is to acquire GloNav is great news for Ceva and in line with the company’s strategy to focus on its strength as a leading silicon intellectual property SIP provider for DSP cores, multimedia, Bluetooth and SATA products.” said Gideon Wertheizer, Ceva CEO.

NXP’s acquisition of GloNav caps a busy year of high-profile acquisitions in the GPS sector of the semiconductor industry. A week ago wireless chip and chipset provider Atheros Communications Inc. announced plans to acquire GPS tech supplier u-Nav Microelectronics in a $54 million deal. Prior to that, SiRF Technology acquired Centrality Communications while Broadcom acquired Global Locate.