Ceva, an Israeli intellectual property licenser that deals with digital signal processing, has acquired French company RivieraWaves, which is responsible for licensing Wi-Fi and Bluetooth technologies.
Ceva is responsible for the IP present in many smartphone chips that allows chips to interact with a mobile network. It also licenses technology for always-on voice activation and face sensing, as well as object detection and gesture recognition.
Ceva expects that the acquisition of RivieraWaves will increase its $22 million per year revenue by 25 percent, although RivieraWaves' own revenue was only $4 million in 2013. Ceva believes shipments of microchips bearing its IP will reach 400 million by 2018.
"RivieraWaves in an excellent acquisition fit for Ceva, enabling us to further expand into the connectivity IP space with production-proven leading-edge technologies, including the most advanced standards in Wi-Fi and Bluetooth," says CEO Gideon Wertheizer in a statement.
The acquisition makes sense from a business perspective, since Ceva already licenses a number of technologies used in mobile phones, most of which also contain Bluetooth and Wi-Fi. With the portfolios of both companies combined, Ceva may serve as a one-stop shop for wireless connectivity IP.
"We are proud and excited to join Ceva, having successfully cooperated with them in the last two years for several joint customers," says RivieraWaves CEO Ange Aznar. "Our market-leading connectivity IP is highly complementary to their existing portfolio and together we are in a position to expand and strengthen Ceva's customer base and market reach."
Ceva is paying a total of $19 million for RivieraWaves. Of that, $12 million will be paid immediately, while the remaining amount will be held until certain performance expectations are met. Ceva also agreed to a two-year retention plan for RivieraWaves employees, ensuring that the acquisition will not result in a sudden loss of employment for those involved.
In addition to expanding its IP options for smartphones, the acquisition will allow Ceva to expand into developing markets such as wearable technology and the Internet of Things. With major companies such as Google and Apple beginning to enter the wearable technology market, Ceva will offer licenses for technology that is integral to these devices.