NEW YORK-DSP Communications Inc. priced Thursday for sale Friday a common stock offering of 3.5 million shares at $26 each. The new add-on issuance is the company’s first since its initial public offering in March 1995.
Some 901,368 of the shares were to be sold by and for Tokyo-based Kenwood Corp., which will no longer have an equity stake in DSP Communications after the offering. The remaining shares sold will garner funds to be used for general corporate purposes, including working capital.
Oppenheimer & Co. Inc., New York, is lead manager of the offering in the United States of 1.8 million of the shares, and in Asia of 600,000 of the shares. Oppenheimer International Ltd. is lead underwriter of the sale in Europe of 600,000 of the shares.
DSP Communications, headquartered in Cupertino, Calif., takes its name from the digital signal processing software it uses in development of computer chip sets for wireless communications applications.
Although based in California and incorporated in Delaware, the company conducts most of its research and development in Israel, where 106 of its 119 employees are located. Last October, DSP Communications paid $14.1 million to purchase CTP Systems Ltd., an Israeli corporation engaged in the development and manufacture of wireless private branch exchange systems.
According to statements in the preliminary prospectus issued in advance of the new stock sale, DSP Communications believes it is “the largest independent vendor of baseband chip sets to original equipment manufacturers in the Japanese digital cellular telephone market, with customers such as Kenwood, Kyocera, Sanyo and Sharp.”
The preliminary offering statement cautions that DSP Communications’ future performance, “is substantially dependent upon the extent to which existing OEMs (original equipment manufacturers) elect to purchase baseband chips from outside sources rather than manufacture their own chips … Moreover, the expected emergence of Personal HandyPhone Services, a microcellular technology potentially competitive with today’s existing Japanese analog and digital cellular networks, could reduce sales in Japan of digital cellular telephones incorporating the company’s baseband chip sets.”
Last November, DSP Communications signed a licensing agreement to use Qualcomm Inc.’s Code Division Multiple Access technology in the development of CDMA-based subscriber equipment. It also is working with NEC Corp. to develop baseband chip sets to support voice and data capabilities in the Time Division Multiple Access markets.