In a significant move within the tech industry, SiTime Corporation (NASDAQ: SITM), renowned for its precision timing solutions, has announced an exclusive agreement to acquire clock products and license all clock Intellectual Property (IP) from Aura Semiconductor. The all-cash transaction, valued at $148 million, with additional earnouts capped at $120 million, marks a strategic shift for SiTime as it further solidifies its presence in the $10 billion timing market. The deal is set to finalize by the end of 2023.
Rajesh Vashist, CEO and chairman of SiTime, outlined the company’s vision, stating, “SiTime’s focus has been on solving complex oscillator challenges, leading to substantial growth in our product offerings. This acquisition allows us to extend our expertise into the clock category, adding 20 high-quality clocks immediately and another 20 by the close of 2024.”
SiTime’s strategic move aims to streamline customer experience, eliminating the need for separate Clock and Oscillator vendors. The company will offer both categories as standalone products and as integrated solutions optimized for core markets such as communications, datacenter, and AI.
Under the terms of the agreement, SiTime gains exclusive and perpetual rights to sell products based on Aura’s IP and clocking portfolio. The payment structure includes $36 million upon closure, followed by $75 million in 2024 and $37 million in 2025, linked to product deliveries from Aura. Additionally, earnout payments, contingent on revenue multiples generated from the acquired products between 2023 and 2028, complete the financial arrangement.
In conjunction with the acquisition, SiTime is establishing a presence in Bengaluru, India, with a dedicated engineering and support team. Barclays served as SiTime’s exclusive financial advisor, facilitating the transaction.
