The $20.5 million acquisition will consolidate the Israeli company’s position in the headsets market.
Israeli wireless chipset solutions for converged communications company DSP Group Inc. (Nasdaq: DSPG) today announced the acquisition of SoundChip SA, which supplies active noise cancellation (ANC) technology, engineering services, design tools, and production-line test systems for headsets.

DSP Group has agreed to pay $14.5 million in cash upon closing of the acquisition and up to an additional $6 million in milestone performance payments. The transaction is expected to close in the third quarter of 2020, subject to customary closing conditions and DSP Group will fund the transaction from cash. The company had $125 million in cash at the end of the first quarter of 2020.

The acquisition combines SoundChip’s proven capabilities in hybrid ANC with DSP Group’s SmartVoice advanced low-power voice processing platform, algorithms, and mixed-signal expertise to streamline the delivery of wireless and true wireless stereo (TWS) headsets, from concept through to manufacturing. DSP Group’s technologies have recently been adopted by Google, Panasonic and Technics in their latest TWS headset models.

The acquisition of SoundChip, alongside the strategic customer wins, marks a major milestone for DSP Group as it emerges as a best-of-breed provider of technology and expertise for smart hearables, a market that is expected to grow rapidly.

SoundChip operates in Switzerland, the UK and Hong Kong and has 50 employees.

DSP Group CEO Ofer Elyakim said, “The global pandemic has created extensive challenges for businesses and consumers worldwide, but it has also intersected with DSP Group’s business initiatives, presenting significant new opportunities. Major trends, including work from home, remote communications, and voice as a user interface, all emphasize the need for robust, integrated, and highly optimized state-of-the-art voice and connectivity solutions. DSP Group is committed to providing these solutions to meet the needs of our customers and their rapidly expanding markets. The acquisition of SoundChip is an important element of our overall strategy to efficiently deliver the highest quality and most comprehensive solutions into an expanding TAM for voice and communications devices.”