Tunnel Magnetoresistance ("TMR") Represents
Fastest Growing Technology in Magnetic Sensing, Approaching
$1B SAM by 2030
MILPITAS, Calif., Aug. 8, 2023
/PRNewswire/ -- Crocus Technology ("Crocus"), a leader in advanced
Tunnel Magnetoresistance ("TMR") sensor technology, today is
announcing that it has signed a definitive agreement to be acquired
for $420 million in cash by Allegro
MicroSystems, Inc. ("Allegro") (Nasdaq: ALGM) a global leader in
power and sensing semiconductor technology for motion control and
energy efficient systems.
Crocus brings to Allegro unique technology and products well
suited to serve high-growth applications in e-mobility, clean
energy and automation, supported by more than 200 patents. The
magnetic sensing market is expected to increase to over
$5 billion by 2030, with TMR
representing the fastest-growing segment and expected to approach
$1 billion in addressable market by
2030. Automotive and industrial applications are expected to fuel
TMR's estimated 30% CAGR, which significantly exceeds the growth of
the overall magnetic sensing market.
"Allegro has invested in TMR technology for the past decade,
providing our customers with innovative and high-performing
solutions enabling them to design products with optimal
performance. We are seeing broader application of TMR technology as
the megatrends of electrification and automation accelerate. This
highly complementary acquisition aligns perfectly with Allegro's
growth initiatives and our focus on e-mobility, clean energy and
automation," said Vineet Nargolwala,
President and CEO of Allegro. "In addition to accelerating our TMR
roadmap and further strengthening our leadership in magnetic
sensors, the acquisition will allow us to offer a broader and more
differentiated product offering to benefit our customers. We also
welcome the deep expertise and technical talent that Crocus will
add to the Allegro team."
Zack Deiri, President and CEO of Crocus, said, "The Crocus team
is excited to join Allegro and unite complementary expertise to
create superior, highly differentiated customer solutions. By
combining Crocus's best-in-class advanced TMR technology with
Allegro's long-standing partnerships with leading automotive and
industrial OEMs and tier-1's, together, we expect to accelerate the
adoption of TMR in targeted automotive and industrial markets. I am
very proud of what Crocus has accomplished and am excited to
optimize our TMR technology's full potential together with
Allegro."
The planned acquisition of Crocus will be funded with a
combination of cash on hand and a new term loan. The transaction
has been approved by the board of directors of both companies.
Subject to customary regulatory approvals and closing conditions,
the transaction is expected to close by the end of calendar year
2023.
About Crocus
Crocus Technology is a leader in
providing advanced TMR sensor technology solutions to designers and
manufacturers of industrial, automotive and consumer electronics.
Crocus develops XtremeSense TMR advanced sensor technology which
provides the highest sensitivity, lowest power consumption and
smallest size by comparison to other magnetic technologies such as
Hall, AMR and GMR. Founded in 2006, Crocus is a privately held,
VC-backed company with over 200 patents and approximately 85
employees. The company is headquartered in Milpitas, California, with an R&D facility
in Grenoble, France. Crocus
Technology can be found online at
https://crocus-technology.com/.
About Allegro MicroSystems
Allegro MicroSystems is a leading global designer, developer,
fabless manufacturer and marketer of sensor integrated circuits
("ICs") and application-specific analog power ICs enabling emerging
technologies in the automotive and industrial markets. Allegro's
diverse product portfolio provides efficient and reliable solutions
for the electrification of vehicles, automotive ADAS safety
features, automation for Industry 4.0 and power saving technologies
for data centers and green energy applications.
Cautionary Language
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. We
intend such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements contained in
Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical facts contained in
this press release should be considered forward-looking statements,
including, without limitation, statements regarding the expected
benefits of a business combination with Crocus Technology. These
statements involve known and unknown risks, uncertainties and other
important factors that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. In some cases, you can identify
forward-looking statements by terms such as "aim," "may," "will,"
"should," "expect," "exploring," "plan," "anticipate," "could,"
"intend," "target," "project," "would," "contemplate," "believe,"
"estimate," "mission," "predict," "potential," "seek," or
"continue," or the negative thereof and similar words and
expressions, although not all forward-looking statements contain
these words. No forward-looking statement is a guarantee of future
results, performance, or achievements, and one should avoid placing
undue reliance on such statements.
Forward-looking statements are based on management's current
expectations, beliefs and assumptions and on information currently
available to us. Such beliefs and assumptions may or may not prove
to be correct. Additionally, such forward-looking statements are
subject to a number of known and unknown risks, uncertainties and
assumptions, and actual results may differ materially from those
expressed or implied in the forward-looking statements due to
various factors, including, but not limited to, those identified in
Part II, Item 7. "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and Part I, Item 1A. "Risk
Factors" in our Annual Report on Form 10-K for the year ended
March 31, 2023. These risks and
uncertainties include, but are not limited to: downturns or
volatility in general economic conditions,; our ability to compete
effectively, expand our market share and increase our net sales and
profitability; our reliance on a limited number of third-party
semiconductor wafer fabrication facilities and suppliers of other
materials; our failure to adjust purchase commitments and inventory
management based on changing market conditions or customer demand;
shifts in our product mix or customer mix, which could negatively
impact our gross margin; the cyclical nature of the analog
semiconductor industry; any downturn or disruption in the
automotive market; our ability to compensate for decreases in
average selling prices of our products and increases in input
costs; our ability to manage any sustained yield problems or other
delays at our third- party wafer fabrication facilities or in the
final assembly and test of our products; our ability to accurately
predict our quarterly net sales and operating results; our ability
to adjust our supply chain volume to account for changing market
conditions and customer demand; our dependence on manufacturing
operations in the Philippines; our
reliance on distributors to generate sales; the effects of COVID-19
on our supply chain and customer demand; our ability to develop new
product features or new products in a timely and cost-effective
manner; our ability to manage growth; any slowdown in the growth of
our end markets; the loss of one or more significant customers; our
ability to meet customers' quality requirements; uncertainties
related to the design win process and our ability to recover design
and development expenses and to generate timely or sufficient net
sales or margins; changes in government trade policies, including
the imposition of export restrictions and tariffs; our exposures to
warranty claims, product liability claims and product recalls; our
dependence on international customers and operations; the
availability of rebates, tax credits and other financial incentives
on end-user demands for certain products; risks, liabilities, costs
and obligations related to governmental regulation and other legal
obligations, including export control, privacy, data protection,
information security, consumer protection, environmental and
occupational health and safety, anti-corruption and anti-bribery,
and trade controls; the volatility of currency exchange rates; our
ability to raise capital to support our growth strategy; our
indebtedness may limit our flexibility to operate our business; our
ability to effectively manage our growth and retain key and highly
skilled personnel; our ability to protect our proprietary
technology and inventions through patents or trade secrets; our
ability to commercialize our products without infringing
third-party intellectual property rights; disruptions or breaches
of our information technology systems or those of our third-party
service providers; our principal stockholders have substantial
control over us; the inapplicability of the "corporate opportunity"
doctrine to any director or stockholder who is not employed by us;
anti-takeover provisions in our organizational documents and under
the General Corporation Law of the State
of Delaware; our inability to design, implement or maintain
effective internal control over financial reporting; changes in tax
rates or the adoption of new tax legislation; the negative impacts
of sustained inflation on our business; disruptions in the banking
and financial sector that limit our or our partners' ability to
access capital and borrowings; the physical, transition and
litigation risks presented by climate change; and other events
beyond our control. Moreover, we operate in an evolving
environment. New risk factors and uncertainties may emerge from
time to time, and it is not possible for management to predict all
risk factors and uncertainties. Our risk factors may be updated or
supplemented from time to time in our other filings with the SEC,
which are accessible on the SEC's website at
https://www.sec.gov/ and the Investors Relations page of our
website at https://investors.allegromicro.com/.
You should read this press release with the understanding that
our actual future results may be materially different from what we
expect. We qualify all of our forward-looking statements by these
cautionary statements. All forward-looking statements speak only as
of the date of this press release and, except as required by
applicable law, we do not plan to publicly update or revise any
forward-looking statements contained herein, whether as a result of
any new information, future events, changed circumstances or
otherwise.
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SOURCE Crocus Technology