Venture firms exit stake in Israeli communications company in $160m deal

Both Sigma and CopperGate are manufacturers of system-on-chip semiconductors for set-top boxes, Blu-Ray players, network players and other media devices. CopperGate is headquartered in Israel but has operations in Sigma’s key market, the US.

Sigma will pay an estimated $92m in cash and four million shares to CopperGate shareholders. Sigma has also agreed to pay up to an aggregate of $5m in cash to specified CopperGate employees, provided that the eligible employee remains employed by Sigma and certain milestones are achieved. Sigma will also assume unvested stock options held by CopperGate employees that will become exercisable for approximately 0.5 million Sigma shares when vested in accordance with their existing schedules.

Tamir Fishman reportedly owns 31 per cent of CopperGate, while Carmel holds 27 per cent and Motorola nine per cent. The transaction is expected to close within the next two months.

Sigma CEO Thinh Tran said, “From Sigma’s perspective, we believe that the acquisition of CopperGate provides substantial benefits to our existing business while positioning our combined company to offer superior value solutions for the future. We believe it will enhance the breadth of our technology so that we extend our position as a world-class provider of complete home entertainment chipset solutions for all forms of media processing and communications. By combining forces, we are able to launch a more comprehensive set of solutions and capitalise on a broader range of market opportunities.”

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