Tessera buys camera module business for $23M
Tessera Technologies Inc. will spend about $23 million to buy Flextronics International Ltd.'s camera module manufacturing business, a move it expects to help its DigitalOptics business grow in the $9 billion mobile camera market.
Tessera, based in San Jose, Calif., also said Friday that it expects revenue for the current quarter will drop about 31 percent from the same period in 2011. The company's revenue has dropped for the past three quarters.
Tessera on Friday predicted first-quarter revenue to range between $46.5 million and $47.5 million. It had revenue of $67.8 million in the January-March quarter in 2011.
The company, which licenses miniaturization technology for electronic devices, also said it will start paying a quarterly cash dividend of 10 cents per share, with the first one payable June 14 to shareholders of record on May 24.
Meanwhile, Tessera expects the camera module deal to close by the third quarter. It said the acquisition from Singapore-based Flextronics includes customer contracts and a lease on a Chinese factory. It said the deal is a key step in transforming its DigitalOptics subsidiary from an optical and image enhancement software and components business to a supplier of camera modules for mobile phones.
It expects the business to be able to make about 50 million camera module units annually.
Flextronics said in a separate statement it will keep a portion of its Vista Point Technologies camera module business and focus on strengthening its manufacturing services.
Shares of Tessera fell 25 cents, or 1.5 percent, to $16.48 in Friday morning trading, while Flextronics shares added 2.9 percent, or 21 cents, to $7.38.