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Icera Challenges Rivals With Sirific Buy

Several months after raising a $40 million equity round, semiconductor company Icera Inc. will merge with onetime rival Sirific Wireless Corp. The acquisition makes Icera a viable competitor against Qualcomm Inc. and other companies offering a full chipset for wireless devices.

'Now we've got all three' necessary chips for modem chipsets, said Stan Boland, chief executive of Icera. 'Next we are going to look at how to put them all together. We're working on a roadmap that gets us to LTE.'

LTE, or long-term evolution, is a method of broadband delivery that makes use of existing cellphone towers, rather than building a new network from scratch, and is endorsed by companies including Motorola Inc., Nokia Corp. and Alcatel-Lucent.

The terms of the merger were not disclosed, but Sirific Chief Executive Russ Johnson said it was an all-stock deal. Johnson will not join the 42 Sirific employees who are now a part of Icera.

'This was a deal I personally helped to structure,' Johnson said. 'I'm not disappointed with the outome at all. I'm a general manager, and [Icera] doesn't need two CEOs.'

Johnson said Sirific's venture backers, which retain a stake in the new company, are pleased with the deal.

Sirific raised more than $55 million in several rounds beginning in 2001. Investors in the company include Agilent Ventures, BDC Venture Capital, Celtic House, Hunt Ventures, Intel Capital, Tech Capital Partners, Waterloo Ventures, and Working Ventures. Many of the firms are in Canada, where Sirific has a design facility.

Attempts to reach Sirific's investors were not successful.

Sirific is based in Richardson, Texas. The company's employees will stay in their current offices. Icera is based in Bristol, U.K., and now has 260 employees.

Until the acquisition, Icera produced baseband chips and power-management chips, two of the three components needed for a full wireless chipset. Sirific makes the third type, radio-frequency chips, which allow wireless devices to tune in different frequencies.

Founded in 2002, Icera has raised about $140 million in venture funding. The $40 million round, which closed in September, was led by newcomer Tudor Investment Corp., with participation from previous backers Accel Partners, Atlas Venture, Amadeus Capital Partners, Balderton Capital and 3i Group PLC.

Boland said Icera could seek another round in the coming year, and was not immediately aiming to go public. With a full chipset to offer - which Boland said would be cheaper and better than the competition's - the company would seek to get its technology installed in various devices, beginning with data cards and ending with phones.