ACT gains US$35m on investment in UK chip firm

28 Sep 2004

Dublin-based venture capital firm ACT has sold its shareholding in a UK chip firm to Nasdaq-listed US semiconductor giant Broadcom for US$35m – gaining three times on its initial investment in the firm in 2001. The acquisition of Cambridge-based Alphamosaic is the largest transaction of a private semiconductor company since the end of the stock market bubble in technology stocks in 2001.

Alphamosaic is a fabless semiconductor company that specialises in low power multimedia processors for mobile phones and video enabled consumer products. The company’s VideoCore architecture enables multimedia features on the latest generation of mobile devices such as Video on Demand, MP3 audio, digital camcorder, megapixel-class camera and 3D games

In connection with the acquisition, Broadcom issued approximately 4.17m shares worth approximately US$120.3m based upon the Nasdaq closing price of US$28.86 per share.

Arising from the sale, ACT has received 1.142m Broadcom shares that will become freely tradeable following their registration with the Securities and Exchange Commission.

ACT initially invested in Alphamosaic in November, 2001 and through successive funding rounds the amount invested rose to €8.5m, and with a shareholding of nearly 27pc ACT was the largest shareholder. ACT’s shareholding in Broadcom is worth approximately $33m or €27m.

Commenting on the deal ACT’s managing partner Niall Carroll said: “Alphamosaic is an outstanding example of how an early stage company, through innovative technology and strong management execution, achieved a leadership position in one of the world’s hottest semiconductor sectors – mobile digital video.

“We are delighted to have provided the funds that enabled Alphamosaic achieve this success. This sale follows on our sale in July of Amphion, the Belfast-based semiconductor IP company engaged in the digital video arena, to Connexant Inc., also for over three times our investment,” Carroll said.

By John Kennedy