Atmel, a provider of microcontroller and touch solutions, entered into a definitive agreement to sell its Smart Card (SMS) business based in Rousset, France and East Kilbride, UK to INSIDE Contactless (INSIDE) following the completion of the information and consultation process with the works council of Atmel Rousset in France (the "Works Council"). As previously announced, INSIDE signed the agreement on May 2, subject to acceptance by Atmel following completion of the information and consultation process with the Works Council.
Pursuant to the definitive agreement, INSIDE will pay US$37 million in cash at the closing, subject to a post-closing working capital adjustment and an additional cash consideration of up to $21 million if certain earnout targets are met in 2010 and 2011. As part of the transaction, Atmel has agreed to make a minority investment in INSIDE of approximately $4 million. The definitive agreement also provides INSIDE a royalty-based, nonexclusive license to certain business-related intellectual property in order to support the current SMS business and future product development. In addition, INSIDE will enter into a multiyear supply agreement to continue sourcing wafers from the fabrication facility in Rousset, France that Atmel recently sold to LFoundry. The transaction is expected to close by the end of the third quarter of 2010, subject to certain closing conditions.
"This transaction accelerates Atmel's transformation to high-growth, high-margin businesses and furthers our goal to become a microcontroller and touch focused company," said Steven Laub, Atmel's President and CEO. "We believe that the combination of Atmel's SMS business with INSIDE is highly complementary and will benefit SMS customers, employees and the smart card industry."