Microtune Announces Agreement to Acquire Auvitek

PLANO, Texas & SHANGHAI — Microtune®, Inc. (NASDAQ: TUNE) today announced the signing of a definitive agreement to acquire privately-held Auvitek International, Ltd. for approximately $9 million in cash and stock and with a potential earn-out if certain performance targets are met, all subject to various standard closing conditions. The acquisition is expected to close during the month of July.

Microtune, inventor of the single-chip TV tuner, is a leading supplier of radio frequency (RF) silicon and systems solutions for the cable TV, digital TV (DTV) and automotive entertainment markets. Auvitek is a supplier of advanced DTV demodulator integrated circuits (ICs) for the HDTV and TV-enabled peripherals markets with primary engineering operations based in Shanghai, China. The addition of Auvitek’s complementary digital components will transform Microtune from a pure-play tuner supplier to a developer of highly integrated RF-to-bits solutions.

“The acquisition of Auvitek’s team and technology will not only enable us to target a larger opportunity in the worldwide integrated digital TV market, but also will allow us to better serve customers with more complete solutions,” said James A. Fontaine, President and CEO of Microtune. “It enriches our portfolio of products; it substantially builds our intellectual property and employee talent base; and it adds resources, alliances and relationships that will help accelerate penetration into the China digital TV market.”

“Auvitek has been committed to engineering best-in-class demodulation and channel decoding technology, and we are excited about becoming a part of Microtune,” said Pete Birch, President and CEO of Auvitek. “The strong synergies in our technologies, markets, and customers, coupled with Microtune’s global scale and financial strength, will help accelerate our growth and design wins. We join a company that shares our commitment to customers in providing high-performance electronics that ensure a quality TV viewing experience for consumers.”

Upon the close of the acquisition, Auvitek will be wholly-owned by Microtune. Birch will become Vice President and General Manager of the newly-formed Microtune Digital Television Business, reporting to Executive Vice President, Barry F. Koch.

Under the terms of the agreement, Microtune will pay approximately $6.8 million in cash and one million shares of Microtune stock, with a current value of approximately $2.2 million, for the Auvitek business.

“With its existing products, Auvitek will provide an additional revenue stream, although its financial contribution will be small today, in the mid single-digit millions per year. We do not expect it to be accretive in the near term, and it is expected to delay breakeven on a consolidated basis until late 2010,” Mr. Fontaine said. “We are excited by the longer-term potential of this strategic acquisition, one that we believe is achieved at a very reasonable price. We see it as an important, future growth engine for the Company, one that will ensure our health and competitive strength in the future as we gain traction initially in the China TV market.”

Mr. Fontaine added, “Together, Microtune and Auvitek will continue to raise the bar of innovation in the industry and continue to deliver best-in-class products and solutions to our customers. We are very pleased to welcome the Auvitek team and are excited to work together to create new opportunities for growth.”

Mr. Fontaine further reflects on the business significance of the Auvitek acquisition in an interview available online. Microtune executives also plan to provide additional information during the Company’s Second Quarter 2009 Conference Call, expected to be held on July 23, 2009 at 4:00 PM (CT).