January 18, 2010 / 6:07 PM / in 8 years

Mosaid signs Samsung deal, ups '10 outlook

BANGALORE (Reuters) - Patent licensing firm Mosaid Technologies Inc said it signed a new semiconductor patent license agreement with Samsung Electronics Co Ltd and raised its fiscal 2010 view, sending its shares up as much as 8 percent.

<p>Visitors walk behind a logo of Samsung Electronics on a glass door at its headquarters in Seoul January 7, 2010. REUTERS/Jo Yong-Hak</p>

Pro forma earnings per share for fiscal 2010 is now expected to be in the range of C$2.58 ($2.52) to C$2.64, up from C$2.16 to C$2.22.

Mosaid now expects fiscal 2010 revenue between C$68 million and C$70 million, up from its previous range of C$65 million to C$67 million, it said in a statement.

“The increase in guidance for annual revenues and pro forma net income reflects the impact of our new semiconductor patent license agreement with Samsung, as well as our confidence in signing additional patent license agreements that will have a positive impact on our financial results,” said CEO John Lindgren.

Under the terms of the patent portfolio license agreement, Samsung will receive a lives-of-patents license under certain patents and applications, and a five-year term license under certain other patents and applications, for memory integrated circuit products.

Samsung will also receive a five-year license for non-memory integrated circuit products. Samsung will make a series of fixed payments during the term.

Under the patent purchase agreement between the two companies, Mosaid will buy a portfolio of patents from Samsung related to semiconductor device, circuit and processing technologies.

Mosaid said a series of fixed payments is due to Samsung in 2014.

In addition, both companies entered into a memorandum of understanding, under which they will explore the potential joint development of a new high-performance NAND flash memory device.

Though Mosaid has not provided much detail about the terms of the deal, Wellington West Capital Markets analyst Sean Peasgood said “It’s positive that it’s been done, because Samsung is a major player in the memory chip market.”

The Samsung deal gives the Street a little more confidence that Mosaid will be able to renew other memory deals, he said.

The analyst also sees wireless deals as another upside for Mosaid, noting that the company has only signed a few wireless companies as of now.

“I don’t know when they’re going to come in, I do expect new wireless agreements to come to the forefront,” Peasgood added.

Shares of the Kanata, Ontario-based company were trading up 8 percent at C$21.61 Monday afternoon on the Toronto Stock Exchange.

Reporting by Isheeta Sanghi in Bangalore; Editing by Unnikrishnan Nair and Aradhana Aravindan

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