Atmel has confirmed that it has now entered into a definitive agreement to sell its Smart Card (SMS) business based in East Kilbride and Rousset to INSIDE Contactless.
We reported last week that IT had received an offer from the company to acquire the business.
INSIDE will pay $37 million in cash, subject certain capital adjustments, and an additional cash consideration of up to $21 million if certain earnings targets are met in 2010 and 2011.
INSIDE will also have, states Atmel, a royalty-based, non-exclusive licence to IP that will support the current SMS business and future product development.
Additionally, INSIDE will enter into a multi-year supply agreement to continue sourcing wafers from the fabrication facility in Rousset, France that Atmel has just sold to LFoundry.
As part of the transaction, Atmel has agreed to make a minority investment in INSIDE of approximately $4 million.
"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 Chief Executive Officer.
"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."
The deal is expected to be closed by the end of the third quarter of 2010, says Atmel.