CSR's share price soars on news of a technology-transfer deal with global giant Samsung.
CSR plc (LSE: CSR) -- a leading global provider of personal wireless technology -- was up 39% by just after 9am this morning, on news that it's done a deal to transfer some of its operations to Samsung Electronics. In exchange for transferring its handset connectivity and location technology development, and 310 associated staff, CSR will get $310 million in cash, but retains revenues from its existing handset products. In addition, Samsung will pay $34.4 million for a 4.9% stake in CSR.
As well as the surge in share price, shareholders will benefit from a return of up to $285 million of surplus capital, mostly arising from the announced deal, but also including $40.5 million that's outstanding under a buy-back announced in February 2012.
Joep van Beurden, CEO of CSR, said:
"This transaction will accelerate our transformation into a higher gross margin platform company operating in attractive growth markets where we have a leading market position. As a result, we will be a more competitive, more differentiated and more profitable business."
And the good news is set to continue, as CSR expects to report second-quarter revenues at the upper end of the previously announced guidance range of $245 - $265 million, and remains on track to deliver full-year revenue in line with market consensus revenue estimates.
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> Jon Wallis doesn't own shares in CSR plc.