Silicon Systems Limited (SSL) the Dublin-based intellectual property chip design company is to seek a listing on the London and possibly the US Nasdaq stock exchange at the end of April or early May. The deal could value the company at up to $700 million (€722 million).
It is understood that SSL plans to raise $100 million through the placing, thereby putting an initial valuation on the company of between $600$700 million. The bulk of the stock is likely to be issued through institutional European investors. The amount available to Irish investors is likely to be very limited and according to one industry source will come down to a "dogfight between the brokers".
The Irish Times has learned the company has appointed investment houses Goldman Sachs, Lehman Brothers and Davy Stockbrokers as its advisers for the deal.
SSL already has some very high profile investors. In 1998, Goldman Sachs and other investment houses associated with it took a 23 stake, one of only three IT investments it made in Europe in that year. ST Microelectronics invested $300,000 in return for an option for a 20 per cent stake. SSL, which employs around 200 people, has long been tipped as a potential stock market candidate, and would be viewed within industry circles as a key technology infrastructure player, particularly in the area of wireless application protocol.
This week the company secured a significant deal with publicly-quoted UK chip design company, ARM, to licence its technology for SSL's products.
The world's top 10 digital mobile phone companies currently use ARM technology in their devices, opening up a huge market for SSL to develop products for this sector.
ARM is viewed as a giant within the intellectual property chip design business and currently carries a larger market capitalisation than British Airways, although it has been listed on the London stock exchange for a relatively short period. SSL has worked to closely base its own business model on that of ARM.
However, SSL differs in that it develops entire product platforms for wireless technology companies featuring technologies from a range of component manufacturers. Once designed they then licence the intellectual property embedded within the products to these clients.
SSL expects to see a dramatic increase in its business now because this is the first time ARM has signed such a deal with another player in the intellectual property design market.
Previously mobile telecommunications companies wishing to use ARM's designs in their silicon chips had to use silicon chip manufacturers with ARM licences. These tended to be higher cost US-based manufacturers. SSL, however, currently works with two high volume, low cost, Taiwanese silicon manufacturing groups, which it is understood to be about to announce partnership agreements with. ARM's licence agreement with SSL means it will offer an extremely attractive lower cost of manufacture alternative for mobile telecommunications companies.
