Allegro MicroSystems (Allegro), a global leader in sensing and power semiconductor solutions for motion control and energy saving systems, announced that it has signed a definitive agreement to acquire Crocus technology (Crocus) for $420 million.

The acquisition of Crocus, a privately held company and leader in advanced tunnel reluctance sensor technology, will bring to Allegro a very unique set of technologies and products, as well as more than 200 related patents, well suited for high-growth applications in areas such as electric transportation, clean energy and industrial automation. The magnetic sensor market is expected to reach more than $5 billion in sales by 2030, while TMR is the fastest growing segment and is expected to approach $1 billion by 2030. Automotive and industrial applications will drive the TMR market to grow at a compound annual growth rate of 30%, which will significantly outpace the overall magnetic sensor market.

Allegro MicroSystems is a leading global fabless manufacturer of sensors and dedicated analog power ics, designing, developing, and marketing these products to support emerging technologies in the automotive and industrial markets. Allegro’s diverse product portfolio provides efficient and reliable solutions for vehicle electrification, automotive ADAS safety features, industrial automation, and energy-efficient technologies in areas such as data centers and clean energy.

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Vineet Nargolwala, President and CEO of Allegro, said: “Allegro has invested in TMR technology over the past decade in order to provide customers with innovative and high-performance solutions to help them design products with greater performance. As the megatrends of electrification and automation continue to accelerate, we see TMR technology supporting a wider range of applications. This highly complementary acquisition is fully aligned with Allegro’s growth plans and, in addition to accelerating our TMR product development roadmap and further strengthening our leadership position in the magnetic sensor market, will make our product offerings broader and more differentiated, providing additional benefits to our customers.” We welcome Crocus’ talented people with deep expertise and technology to join the Allegro team.”

Zack Deiri, President and CEO of Crocus, said: “The Crocus team is excited to join Allegro, where we combine complementary expertise to build exceptional, highly differentiated customer solutions. By combining Crocus’ best-in-class advanced TMR technology and Allegro’s strong long-term partnerships with automotive and industrial Oems and Tier 1 manufacturers, we expect to accelerate the adoption of TMR in target markets such as automotive and industrial.” I am proud of what Crocus has accomplished and excited to work with Allegro to optimize and unlock the full potential of our TMR technology.” ”

The acquisition of Crocus, which will be paid for with existing cash and the issuance of new debt, has been approved by the boards of directors of both companies. The transaction is expected to close by the end of 2023, taking into account the need for regulatory approvals and preparation of closing terms, and the proposed transaction does not require the approval of Allegro shareholders.