SANTA CLARA, Calif.--(BUSINESS WIRE)--GSI Technology, Inc. (Nasdaq:GSIT), a leading provider of high- performance static random access memory, or SRAM, products incorporated primarily in networking and telecommunications equipment, today announced that it has signed and closed definitive agreements with Sony Electronics Inc. under which GSI acquired substantially all of the assets related to Sony’s SRAM product line. At closing, GSI paid Sony approximately $5.2 million in cash. GSI will make a further cash payment to Sony of approximately $1.7 million following a post-closing adjustment to reflect actual product inventory on hand at closing. GSI will also make future cash payments based on the sale of certain acquired SRAM products over an eight quarter period. The acquisition will be accounted for under the purchase method of accounting.
The acquisition will not have a significant impact on GSI’s total revenues or, except for adjustments required by purchase accounting rules, on its operating results for the second fiscal quarter ending September 30, 2009. Based on historical sales data and current sales projections, GSI believes that the new product line will generate additional revenues of approximately $1 million in the third quarter ending December 31, 2009 and expects that the new product line should generate quarterly revenues of approximately $2 million by the quarter ending September 30, 2010. GSI also expects that, after a transition period of one to two quarters, gross profit margins comparable to GSI’s overall gross margins will be achieved.
