Wi-Fi chip vendor Quantenna will be acquired by ON Semiconductor in a $1.07 billion cash deal. Quantenna shares rose 17.5% this week in light of the announcement.
ON Semiconductor offers energy efficient semiconductor-based solutions for sectors such as automotive, communications, industrial, medical, aerospace and defense. Quantenna’s Wi-Fi chips and software solutions will bolster ON Semiconductor’s connectivity portfolio, which currently consists of wireless RF transceivers supporting Bluetooth, Sigfox, ZigBee and others.
Keith Jackson, president and CEO of ON Semiconductor, said the deal will help strengthen the company’s presence in industrial IoT and automotive markets. “The combination of ON’s expertise in highly efficient power management and broad sales and distribution reach, and Quantenna’s industry leading Wi-Fi technologies and software expertise creates a formidable platform for addressing fast growing markets for low-power connectivity in industrial and automotive applications,” Jackson said in a statement.
In a presentation about the acquisition deal, company executives argued that Wi-Fi has become a network bottleneck, and they expect the market for premium Wi-Fi products to continue to grow at a rapid pace.
“We intend to build capabilities to accelerate our growth in industrial, automotive, and cloud-power end-markets,” Jackson said during the presentation, adding that the combination of Quantenna’s high-performance Wi-Fi technologies and software and ON’s expertise in power management, low-energy Bluetooth and multi-protocol radios “builds a formidable technology platform.”
The deal is expected to close in the first half of 2019, pending shareholder and regulatory approval. Both boards have unanimously approved the acquisition. Under the deal, most of Quantenna’s employees are expected to move to ON Semiconductor.