London, 17 May 2005. HgCapital, the leading sector-focused European mid-market private equity investor, has agreed to acquire the digital cordless business unit of National Semiconductor Corporation. The sale is expected to complete in July 2005.  The newly independent company, to be known as SiTel Semiconductor BV, will design and sell chips to OEMs in the digital short-range wireless communications market, across a range of end-user applications. The acquisition represents HgCapital’s third investment in The Netherlands.

The new company has agreed to acquire the intellectual property and assets of the business.   Its engineering design team creates system products targeted primarily for the home wireless voice and data applications market.  These products include baseband and radio transceivers for cordless DECT (digital enhanced cordless telephony) and VoIP (voice over internet protocol) telephones and base stations as well as cordless gamepads and cordless voice modules.  The company will employ approximately 70 engineers, all of whom are based in ‘s-Hertogenbosch and Hengelo, in The Netherlands.

National’s OEM customers in the cordless market currently include the world’s leading manufacturers of cordless systems.

Commenting on the pending acquisition, Alex Shivananda of HgCapital said: “We are acquiring key assets in an exciting segment of short-range wireless home communications and networking in a growing international market.  The cordless business unit’s leading-edge technology expertise and IPR is very strong and we have an excellent team based in The Netherlands. The business also has a strong product line that generates approximately 5 percent of National Semiconductor’s annual sales.  We are fully supportive of the management team’s strategy for expansion which involves continued growth across multiple applications and broadening its international customer base.”

Asmund Tielens, managing director of the future SiTel, said: “HgCapital’s investment will enable SiTel to focus its resources in the high-volume cordless voice applications market. SiTel’s solutions are exceptional in that they combine high integration and suitability to multimarket segments. Our team is excited about the opportunities available to us in becoming an independent company, which will translate into greater dedication and flexibility in delivering superior customer solutions and profitable growth.”

HgCapital Trust plc, the best-performing UK private equity investment trust in 2004 (Source: AITC), will invest $10.5m in this buy-out.

Deloitte Corporate Finance acted as lead corporate finance adviser and Lovells as legal adviser to HgCapital on this transaction.