Wolfson Microelectronics has made its first overseas acquisition with a foray into Australia to snap up a partner with a speciality in hearing aids.
Edinburgh-based audio chipmaker Wolfson, which has seen its shares halve this year on worries about consumer spending on smartphones and other electronic gadgets, is buying Dynamic Hearing for £3.2 million in cash.
The Melbourne-based company, founded in 2002, builds audio processing software which achieves noise reduction in devices such as mobile phones, Bluetooth headsets, and hearing aids.
Wolfson said: “Having traded profitably in the year to June 2011, it has a proven track record of repeat business with established customers, all of which are leaders in their respective markets.
“The 22 employees will now become part of the Wolfson team and will continue to serve Dynamic Hearing’s existing customers, as well as provide sound processing software for Wolfson’s HD Audio solutions.”
The two companies have been working together over the last 18 months to create a combination of audio processing technologies which offer “a complete platform-agnostic turnkey transmit and receive noise reduction solution”. This would be further deployed across Wolfson’s Audio Hub products for mobile phones and tablet PC applications.
Mike Hickey, CEO of Wolfson, said: “This acquisition secures important intellectual property, adds to our customer base and supports our leadership position in delivering HD Audio solutions for the consumer electronics market.”
Wolfson’s previous acquisitions were both in 2007, when it acquired Buckinghamshire- based microphone specialist Sonaptic for up to £24m and Scottish audio technology start-up Oligon for £2.9m. It currently has cash resources of around £60m.
Derek Milne, product marketing manager at Wolfson, said: “We will be leaving them to continue to run their profitable business under the same management and personnel, albeit they will report into one of our business managers. There is a synergy there, as we were talking to the same end customers, and they will now have the benefit of our global sales team.”
Wolfson warned last month of a sales slowdown this year due to consumer uncertainty, despite the continuing rapid growth in the key smartphone market.
Mr Milne said: “People will just be a bit more careful and prudent with their money and if they have a mobile phone they might keep it for another six months or a year.”
He said one billion smartphones were still expected to be shipped in 2014. “It is a huge market and a huge opportunity for companies like ourselves.”
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