The 310 staff of Dublin-based Silicon Systems Ltd (SSL) are expected to hold a collective $175 million (€189 million) stake in the chip design company when it takes a public listing on the US Nasdaq and London stock exchanges at the end of May.
SSL, now called Parthus Technologies, is expected to raise around $150 million through the placing of 20 to 25 per cent of the company's stock, valuing the firm at almost $700 million.
Parthus has an unusually high staff share option scheme, amounting to 25 per cent of the company's equity, of which 18 per cent is already available to employees.
Despite the sharp decline in the value of technology companies traded on the Nasdaq, Parthus chief executive officer and co-founder, Mr Brian Long, said yesterday: "We take advice from our underwriters who believe the company will be well received in the public market. We are not a dot.com company. We are building infrastructure with a very solid base and much higher barriers to entry."
Goldman Sachs, a 23 per cent shareholder in Parthus, Lehman Brothers and Davy Stockbrokers are understood to be underwriters to the deal.
The share holdings of Parthus co-founders, Mr Brian Long and Mr Peter McManamon, are expected to be valued at around $210 million and $77 million respectively. Mr Long owns just more than 30 per cent of the company and Mr McManamon 10 per cent.
The newly issued stock will only be available to institutional investors.
Parthus has long been earmarked for a stock exchange listing, and has been profitable since it was founded in 1993. But a $7 million investment in research and development led to an operating loss in its last financial year.
SmartForce founder Mr Bill McCabe is a non-executive director of Parthus and was instrumental in arranging the Goldman Sachs investment in December 1998. Enterprise Ireland retains a 10 per cent shareholding in Parthus.
Mr Long says the public listing will provide Parthus with the funding necessary to target key acquisitions and aggressively expand its research and development activity. Parthus is comparable to its UK based business partner and publicly quoted chip design company, Arm Holdings, which has a market capitalisation of $9 billion.
Parthus recently secured a significant deal with ARM to licence its technology for Parthus products. The world's top 10 digital mobile phone companies use ARM technology in their devices, opening up a huge market for Parthus to develop products for the sector.
The business models of both companies are licence and royalty based, a method with particular appeal for market analysts and investors attempting to predict future revenue streams.
Parthus is primarily involved in developing the underlying technologies for mobile Internet devices. It is also heavily involved in the global Bluetooth project to develop an international standard for future wireless communication. It is just one of three companies worldwide licensing Bluetooth products, with around 1,500 companies developing Bluetooth compatible products.
Parthus recently acquired the Global Positioning System (GPS) business of US company, Symmetricom through a cash and stock deal understood to be valued at just under $10 million.
The GPS technology uses satellite information to pinpoint any mobile device to within 5-20 metres of its position. A recent US mandate dictates that by October 2001 all mobile operators and network providers must be equipped with technology allowing callers to emergency services be located in real time within a 100-metre radius.
