If the deal with US peer Cirrus Logic goes through, and that looks likely, Wolfson would become the latest in a string of British tech businesses to be bought by overseas interests in recent years. It follows the sale of Autonomy to Hewlett-Packard, CGI Group’s acquisition of Logica and Vista Equity Partners’ purchase of Misys.
Since its spin-out from the University of Edinburgh in the mid-1980s Wolfson has gone on to considerable success in designing audio chips at the heart of consumer products such as CD players, games consoles and digital cameras. It has carved out an enviable reputation among the hi-fi community as the chip of choice for premium sound quality and is at the cutting edge of high-definition audio. Clearly its technology and expertise will be much coveted by its Stateside suitor.
However, the group has also been at the mercy of the cut-throat mobile phone/tablet market in recent times as it seeks to build scale. Customer product cancellations, stock overhangs and competition have dented its financial performance. Newly-released first-quarter results underline the challenges facing the businesses, with operating losses widening and revenues taking a tumble.
Towards the end of last year, the firm was forced to shed scores of jobs as it adapts to the volatile environment. There will be some further impact on the workforce if a Cirrus deal pushes through.
Wolfson employs about 420 staff – more than half based in the Scottish capital. Its bigger US rival has some 760 workers on its books and the talk is of a combined headcount reduction of around 100 – chiefly in overlapping sales and corporate functions.
This should provide some assurances that the core skill-base of engineering jobs will be retained locally. Yesterday’s takeover document notes that Cirrus “intends to position Edinburgh and Newbury [another Wolfson site] as key European development centres for the combined business”.
The feeling in the stock market, where Wolfson has been listed for the past 11 years, is that Cirrus has struck a good deal, as have the Scots group’s shareholders. Analysts say the bid reflects the value of Wolfson’s expertise, its intellectual property and the potential within a larger-scale business.
The hope must be that this revered innovator of the microchip world can continue making a big noise.
Mall makeover offers big break for capital
THE £850 million masterplan to revamp Edinburgh’s unloved St James Centre has been labelled a game-changer. A Who’s Who line-up of potential store operators has been touted, alongside a major hotel, apartments, office space and terracing.
A revamp of what many consider to be the capital’s number one eyesore has been promised for some time.
Thanks to a new financing deal involving an injection of public cash, work could get under way a year from now, though tram-weary residents face yet more disruption.
As the transformation of the former Waverley Market with its fountains and flora into the dreary Princes Mall proves, it is possible to get it wrong.
With the St James Quarter blueprint, however, there’s an opportunity to change an ugly duckling into a swan.