A chipmaker that quietly moved to Irvine in August is ending a short run as an Orange County-based company with a $180 million buyout.
Sierra Monolithics Inc., which moved its headquarters from Redondo Beach to Irvine, said earlier this month it’s being acquired by Camarillo-based chipmaker Semtech Corp.
The deal is expected to close by year’s end.
The Irvine office, which houses a design center and about 70 workers, is set to stay intact, according to Sierra Monolithics Chief Executive Javed Patel.
“There will be no change at the Irvine office—we are committed to it,” he said. “Over time it will grow.”
In a conference call earlier this month, Semtech Chief Financial Officer Emeka Chukwu said Sierra “runs pretty lean,” suggesting cuts at the newly acquired business wouldn’t be extensive.
“Any cost synergies that we would expect to see from an integration probably would be offset by spending to pursue additional revenue opportunities,” he said.
Sierra Monolithics got started in 1986 and has about 110 employees overall.
The company first came to OC with a design center in the Irvine Spectrum in 2008.
Sierra opened the Irvine site to “accelerate our hiring of the best engineers in the industry,” said George Eaton, senior vice president of engineering.
Sierra sees around $50 million in yearly sales, according to Semtech.
It expects Sierra to grow by 20% to 30% in 2010.
The biggest part of Sierra’s business is designing chips for telecommunications networks that help speed up the transfer of phone calls, video and other data over fiber-optic wires.
It sells the chips to telecommunications gear makers, including China’s Huawei Technologies Co. and France’s Alcatel Lucent.
“Our products are characterized by very high performance and they get built into the network infrastructure,” Patel said. “It’s a long design cycle, but once you get in it’s not easy to replace.”
About a quarter of Sierra’s revenue is from chips that go into devices used by the military, including air beacons, unmanned air vehicles, satellites and early warning gear.
In 2000, Sierra raised some $14 million in an initial round of venture funding from Storm Ventures Inc. and U.S. Venture Partners, both of Menlo Park, and the investment arm of IBM Corp.
It raised another $13 million in a second round in 2002.
Commercial Business
Along with its headquarters, Sierra moved its commercial business unit to University Research Park near the University of California, Irvine.
The company has kept a low profile at the Irvine office park.
The biggest reason for the move was to access a bigger pool of chip designers and engineers, according to Patel.
Irvine won out over San Jose, where Sierra maintains a small office near Patel’s home. He has offices in Irvine and Redondo Beach.
“One of the reasons we chose Irvine was the need for expansion and to access more commercial semiconductor talent,” he said. “The Redondo Beach office was very good in terms of talent for the defense side of the business. We also chose it because of the proximity to Redondo Beach.”
Sierra’s Irvine office houses administrative, finance and operational functions.
Most of Sierra’s top executives came here, including the vice presidents of operations and engineering.
Its Redondo Beach office houses some 40 workers and Sierra’s defense businesses.
Patel and Founder and Chairman Charles Harper are set to become members of Semtech’s management team after the deal closes.
Sierra had been looking to go public, according to Semtech, which had been in acquisition talks with the company for about a year.
“We knew that they had been looking at potentially going IPO, but I think they got very comfortable with us as a partnership,” Semtech Chief Executive Mohan Maheswaran said.
Semtech, which is publicly traded with a recent market value of $1 billion, makes power management and filtering chips used in computers, telecommunications gear and industrial uses.
