Crocus Technology (“Crocus”), a leader in advanced Tunnel Magnetoresistance (“TMR”) sensor technology, today is announcing that it has signed a definitive agreement to be acquired for $420 million in cash by Allegro MicroSystems, Inc. (“Allegro”) (Nasdaq: ALGM) a global leader in power and sensing semiconductor technology for motion control and energy efficient systems.
Crocus brings to Allegro unique technology and products well suited to serve high-growth applications in e-mobility, clean energy and automation, supported by more than 200 patents. The magnetic sensing market is expected to increase to over $5 billion by 2030, with TMR representing the fastest-growing segment and expected to approach $1 billion in addressable market by 2030. Automotive and industrial applications are expected to fuel TMR’s estimated 30% CAGR, which significantly exceeds the growth of the overall magnetic sensing market.
“Allegro has invested in TMR technology for the past decade, providing our customers with innovative and high-performing solutions enabling them to design products with optimal performance. We are seeing broader application of TMR technology as the megatrends of electrification and automation accelerate. This highly complementary acquisition aligns perfectly with Allegro’s growth initiatives and our focus on e-mobility, clean energy and automation,” said Vineet Nargolwala, President and CEO of Allegro. “In addition to accelerating our TMR roadmap and further strengthening our leadership in magnetic sensors, the acquisition will allow us to offer a broader and more differentiated product offering to benefit our customers. We also welcome the deep expertise and technical talent that Crocus will add to the Allegro team.”
Zack Deiri, President and CEO of Crocus, said, “The Crocus team is excited to join Allegro and unite complementary expertise to create superior, highly differentiated customer solutions. By combining Crocus’s best-in-class advanced TMR technology with Allegro’s long-standing partnerships with leading automotive and industrial OEMs and tier-1’s, together, we expect to accelerate the adoption of TMR in targeted automotive and industrial markets. I am very proud of what Crocus has accomplished and am excited to optimize our TMR technology’s full potential together with Allegro.”
The planned acquisition of Crocus will be funded with a combination of cash on hand and a new term loan. The transaction has been approved by the board of directors of both companies. Subject to customary regulatory approvals and closing conditions, the transaction is expected to close by the end of calendar year 2023.