Yudu - Finance Monthly October 2012

The Interview

Will Gard CFO at CSR

Samsung acquires CSR's handset technology for $310 million

I am Will Gardiner, and I am CFO at CSR. I’ve been with CSR for four and a half years and I’m responsible for general CFO duties, like accounting and so on, but also M&A, investor relations and IT infrastructure.

Q Q

Can you give an overview of CSR and its organisational structure?

I guess the way I’d start to answer that is by talking about who CSR is and what we do.

The company is a world leader in creating technologies that really impact on consumers’ lives, technologies that consumers really love. An example of that would be our world class audio technology, which people are listening to all the time, whether it is through a wireless headset or wireless speaker. We have imaging technology that enables consumers to take great photos and send them around wirelessly. It’s something we are very good at. Then there’s location and GPS. We make the best GPS technology.

CSR is all about developing and providing our consumers with all of these different technologies that impact their lives. We are a global company. We design and develop these technologies around the world; China, UK,

Please introduce yourself?

Israel, US, India. We don’t manufacture the chips, but we outsource the manufacturing of them and then sell them to our customers.

We have a process from beginning to end: we have the development organisation that develops the chips, the marketing department that figures out how to market them and where they should go, a sales team that sells them, an operations team that liaises with the chip manufacturers, then the support teams, such as IT.

What are the main areas of CSR expertise?

In these different areas of technology, whether it is audio, image or printing, we create something that consumers can tell is different. It might sound better, look better, or locate you faster. We develop something better for our customer. We are very good at creating devices that are low powered and run on batteries. We are good at energy efficiency.

Samsung recently acquired your handset technology for $310m.

Can you discuss the transaction?

The transaction was a classic win-win. Most M&A deals use the word synergy in regards to

cutting costs. We believe that this deal will deliver real additional revenue. We have very good technology to deliver Bluetooth, WiFi and GPS into many devices, including Smartphones and Devices. However, because we lacked a complete product offering in those areas, we haven’t been as successful as we would have liked. Samsung, who has a complete platform, including crucially, the applications processor, should be able to sell many more Bluetooth, WiFi and GPS chips into Smarphones and Tablets than we would.

All of our customers are after a complete platform solution. If I was a handset manufacturer, I would want someone to deliver as much of the solution of what is going into the handset as possible. The biggest part is the ‘applications processor’; it runs the majority of the things a smart phone can do. Whoever sells that part has a very good chance of selling the parts around it, like Bluetooth and Wi-Fi, and Samsung is the biggest player in that market. What they can do is sell our technology alongside their ‘application processor’. The amount they are paying us ($310m) is the value of the technology we are providing, the value of the people that are moving across, and the value that they can make from our technology.