Zoran Corporation to Acquire Microtune, Inc.

Wednesday, September 8th, 2010
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Microtune’s Industry-Leading Silicon Tuner Technologies for the Set-Top-Box and DTV Markets Expand Zoran’s Product Portfolio to Provide Complete End-to-End Solutions

SUNNYVALE, CA — Zoran Corporation (NASDAQ: ZRAN) today announced that it has entered into a definitive agreement to acquire Microtune®, Inc. (NASDAQ: TUNE). Under the agreement, Zoran will pay $2.92 in cash for each share of Microtune’s common stock, resulting in a transaction price of approximately $166 million, or $84 million net of cash acquired. Both boards of directors have approved the transaction, which is expected to close after Microtune shareholder approval, regulatory clearance and satisfaction of customary conditions specified in the agreement. Zoran expects the acquisition to be accretive immediately following the close of the deal, which is expected to be in the fourth quarter of 2010.

Microtune, a pioneer in the development and deployment of silicon tuners for cable set-top-box (“STB”), broadband cable modem, DTV, and automotive entertainment markets, offers a product portfolio that is complementary and synergistic to Zoran’s strategic objectives. With industry-leading customers, the combined company will benefit from technology integration and multiple cross-selling opportunities, creating a single point-of-service for customers.

Zoran is increasing its focus on the STB market as part of its strategy to become a complete provider of solutions for consumer home entertainment. Microtune’s silicon tuners combined with Zoran’s solutions are expected to provide customers a more complete solution from a single supplier and enable OEMs and ODMs to quickly scale cost-performance benefits, and reduce time-to-market for future generations of cable set-top-boxes. Cable operators continue to invest in new technologies, incorporating multi-tuner architectures and DOCSIS® technologies, to accommodate expanding functionality and increasing bandwidth requirements. With Microtune’s silicon tuner and radio frequency (“RF”) technologies, the combined company is expected to be well positioned to address the new industry challenges.

The acquisition will also strengthen Zoran’s position in DTV as the market transitions from traditional can tuners to single-chip TV tuners during the next several years. Adoption of silicon tuners is expected to enable TV manufacturers to meet the growing demand for high-performance, smaller form factor and more cost-effective solutions. In addition, by combining the advanced demodulator technologies of both companies, Zoran’s customers will be able to obtain fully-integrated receivers as multiple new standards for demodulation emerge in various worldwide geographies.

“This strategic acquisition will enhance our position in the core markets we serve and expand our worldwide presence, improving Zoran’s ability to serve our customers,” said Dr. Levy Gerzberg, president and chief executive officer of Zoran. “Further, it underscores our key objectives to increase shareholder value and maximize the value of our assets and we are looking forward to welcoming Microtune’s employees to Zoran.”

“We are excited with the opportunity to join forces with the Microtune team to deliver cutting-edge integrated systems for the fast growing and dynamic STB and DTV markets,” said Ram Ofir, senior vice president and general manager of Zoran’s Home Entertainment Division. “Combining the RF receiver and SoC technologies is designed to provide our customers with a unique value proposition, reducing cost and accelerating time-to-market.”

“Microtune has actively explored a broad range of strategic alternatives during the last several months to enhance shareholder value. The Board of Directors concluded that the Zoran acquisition is the best solution to deliver value to our shareholders,” said James A. Fontaine, president and chief executive officer of Microtune. “We believe there is a great strategic fit between our businesses and Zoran and this transaction will also benefit our customers and employees.”