GSI Technology Acquires SRAM Product Line of Sony Electronics

GSI Technology, Inc., a provider of static random access memory (SRAM) products used primarily in networking and telecommunications equipment, has reportedly signed an agreement with Sony Electronics Inc. to acquire all of the assets related to Sony’s SRAM product line.

 

SRAM is a type of computer memory used in personal computers, disk drives and networking equipment. The acquisition of Sony Electronics’ SRAM product line is said to further strengthen GSI’s position as a reputed supplier of high performance SRAM products.

 

The deal is signed for a value of approximately $5.2 million in cash. Additionally, GSI is also said to make further cash payment to Sony of approximately $1.7 million following a post-closing adjustment and also based on the sale of certain acquired SRAM products over an eight quarter period.

 

The acquisition will be accounted for under the purchase method of accounting.

 

“The acquisition of Sony’s portfolio of advanced SRAM products is an excellent strategic fit for GSI and strengthens our position as a leading supplier of high performance SRAM products,” said Lee-Lean Shu, chairman and CEO, in a statement. “The acquisition further extends our broad SRAM product portfolio and provides us with additional scale to support our ongoing investment in research and development.”

 

The acquisition will not have a significant impact on GSI’s total revenues or, except for adjustments required by purchase accounting rules, on its operating results for the second fiscal quarter ending Sept. 30, 2009.

 

This new acquisition of Sony Electronics’ SRAM product line is expected to generate additional revenues of approximately $1 million in the third quarter ending December 31, 2009 for GSI and quarterly revenues of approximately $2 million by the quarter ending September 30, 2010.

 

GSI also mentioned that it is expecting that, after a transition period of one to two quarters, gross profit margins comparable to GSI’s overall gross margins will be achieved.

 

Founded in 1995, GSI Technology, Inc. is headquartered in Santa Clara, Calif., and has worldwide factory and sales locations.