Silicon Labs acquires Telegesis, a provider of Zigbee modules

Silicon Labs has announced the acquisition of Telegesis, a leading supplier of wireless mesh networking modules based on Silicon Labs’ market-leading ZigBee technology. A privately held company founded in 1998 and based near London, Telegesis has established itself as a ZigBee expert with strong momentum in the smart energy market, providing ZigBee module solutions to many of the world’s top smart metering manufacturers.

This strategic acquisition accelerates Silicon Labs’ roadmap for ZigBee and Thread-ready modules and enhances the company’s ability to support customer needs with comprehensive mesh networking solutions ranging from wireless system-on-chip (SoC) devices to plug-and-play modules backed by best-in-class 802.15.4 software stacks and development tools. Telegesis modules integrate the antenna and provide a pre-certified RF design that reduces certification costs, compliance efforts and time to market. Customers can migrate later from modules to cost-efficient SoC-based designs with minimal system redesign and full software reuse.

The market for ZigBee modules is large and growing. According to IHS Technology, 20 percent of all ZigBee PRO integrated circuits shipping today are used in modules, and ZigBee module shipments are expected to grow at a compounded rate of 24.6 percent between now and 2019.

Telegesis exclusively uses Silicon Labs’ ZigBee technology in its module products, which are deployed in smart meters, USB adapters and gateways for smart energy applications. Additional target applications include home automation, connected lighting, security and industrial automation. The modules come with Silicon Labs’ rigorously tested, field-proven EmberZNet PRO ZigBee protocol stack, which sets the bar for ZigBee stack reliability and has been deployed in more connected products than any other ZigBee PRO stack. Telegesis also offers comprehensive development and evaluation kits to help developers streamline their ZigBee-based applications.

“The addition of Telegesis’s successful module business strengthens Silicon Labs’ position as the market leader in mesh networking solutions for the Internet of Things,” said James Stansberry, senior vice president and general manager of Silicon Labs’ IoT products. “The combination of Telegesis modules, Silicon Labs mesh networking SoCs, best-in-class 802.15.4 software stacks and easy-to-use wireless development tools provides customers with a seamless migration path from modules to SoCs and from ZigBee to Thread-based networks.”

Telegesis’s leadership in the ZigBee module market complements Silicon Labs’ 11 years of experience in developing, certifying and shipping standards-based mesh networking solutions. As strategic partners, both companies share a deep understanding of not only 802.15.4 mesh networking technology but also the certification process.

“The Telegesis team is truly excited to become an integral part of Silicon Labs,” said Ollie Smith, director of business development at Telegesis. “Together, our hardware and software engineering teams will drive innovation in wireless mesh networking while giving customers a flexible choice of module and SoC-based designs leveraging both ZigBee and Thread technology.”

Terms and Guidance

Silicon Labs completed the acquisition of Telegesis on November 20, 2015, for a cash purchase price of approximately $20 million (USD). Telegesis is expected to contribute incremental revenue at an annual run-rate of approximately $8-$10 million for the remainder of Q4 2015 and also for fiscal 2016. Silicon Labs expects the acquisition to be slightly accretive on a non-GAAP basis, including the addition of approximately 20 Telegesis employees.