INSIDE Contactless proposes to buy Atmel’s secure MCU solutions business

AIX-EN-PROVENCE, FRANCE: INSIDE Contactless, a leading provider of contactless secure transaction chip technologies, has entered into an agreement to purchase for cash consideration Atmel’s Secure Microcontroller Solutions (SMS) business.

The transaction will be financed by the existing INSIDE investors led by Gimv and Sofinnova Partners, along with the French sovereign wealth fund, Fonds Stratégique d'Investissement (FSI). Atmel also will make an investment in INSIDE.

“Atmel’s Secure Microcontroller Solutions business offers INSIDE the opportunity to acquire unique people, skills and technologies to reinforce our leadership in the smart card and secure transaction devices market,” said Rémy de Tonnac, chief executive officer for INSIDE Contactless.

“Combining these businesses has the potential to be a game-changing event in the smart card industry. It will create a pure-play fabless semiconductor leader singularly focused on the secure transactions market.”

According to de Tonnac, this combination will put INSIDE in a leading position to meet the growing global demand for solutions in the payments market, the emerging NFC mobile commerce market and the electronic identification market.

“INSIDE Contactless is a global leader in contactless technologies and NFC, and the acquisition of Atmel’s SMS business unit will enable the company to strengthen its position in its current markets, and accelerate its presence in new, fast-growing areas,” said Jérôme Gallot, FSI’s director. “FSI is pleased to join INSIDE’s current investors to enable this important acquisition.”

After completion of the information and consultation process with its Works Council, in accordance with French law, Atmel will seek authorization from its board of directors to enter into the purchase agreement with INSIDE, with the transaction expected to close in the third quarter of 2010, subject to certain closing conditions.

“The SMS product portfolio and market focus is highly complementary to INSIDE Contactless’ current business,” said Steven Laub, Atmel’s president and chief executive officer, “and this deal should be beneficial to both the SMS employees and customers.”

The resulting organization will be the largest fabless semiconductor company in France, and one of the largest in Europe.