CSR plc (CSR.L,CSRE: Quote) announced a transaction with Samsung Electronics Co. Ltd. (SSNLF.PK,SSNNF.PK) and an associated return of capital. CSR has entered into a conditional binding agreement with Samsung for the transfer of CSR's development operations in handset connectivity and location, including 310 people, together with certain rights over CSR's technology in these areas for a consideration of $310 million in cash. None of the revenues associated with CSR's existing handset products will be transferred.
In addition, Samsung will invest $34.4 million in return for new ordinary shares in CSR representing 4.9 per cent of the current issued share capital of CSR at a price of 223 pence per share on completion of the transaction.
The transaction immediately increases CSR's focus on its five high growth markets of Voice & Music, Automotive Infotainment, Indoors Location, Imaging and Bluetooth Smart; accelerates its higher margin platform strategy and improves CSR's overall market position. It is expected to be earnings per share accretive in 2013 before the Return of Capital and to be strongly accretive after the Return of Capital.
The transaction is expected to complete during fourth quarter, 2012.
Following completion of the Transaction, the company intends to return up to $285 million to holders of its ordinary shares and American Depositary Shares representing its ordinary shares, comprising the net proceeds of the Transaction, the Equity Investment and the remaining $40.5 million of the buy-back announced in February 2012.
Further, the company noted that trading during the second quarter of 2012 was robust, and it expects to report second quarter revenues at the top end of the previously announced guidance range of $245 million to $265 million.
CSR remains cautious with respect to order patterns for the second half of the year and currently expects third quarter 2012 revenues to be in the range $260 million to $280 million.
Moving ahead, the company remains on track to deliver market consensus revenue estimates for the full year.
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by RTT Staff Writer
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