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Loughborough-Spectrum Dust-up Rivalry rattles decade-old British DSP partnership By Peter Clarke, EE Times Loughborough, England -- They've been partners for the past 10 years, but signs are that two players in the digital-signal-processing arena are at odds, vying to outdo and possibly even acquire one another. Closely held Loughborough Sound Images and Nasdaq-listed Spectrum Signal Processing Inc. (Vancouver, Canada) are the world's two largest suppliers of general-purpose boards designed around DSP chips. Each nurses ambitions to expand into the other's domestic market. In a sector where consolidation is the watchword, the rivalry could result in a race between the companies to acquire smaller board makers,or in one company's taking over the other. The Loughborough-Spectrum partnership has been based on a 10-year reselling and licensed manufacturing agreement, signed in 1987, that allowed Spectrum to manufacture Loughborough-designed boards and sell them under the Spectrum name. That helped Loughborough gain revenue from North America without the expense of selling and supporting the products, while it concentrated on building sales in Europe. For Spectrum, the deal helped the company build a broader product portfolio quickly to better address the large North American market. Now, 10 years later, the European intentions of Barry Jinks, president and chief executive officer of Spectrum, were revealed when Spectrum bought 3L Ltd. (Edinburgh), a vendor of real-time operating systems and multiprocessor DSP software tools. At the time of the deal last month, Jinks said that "Spectrum's aggressive growth plans naturally include the acquisition of complementary companies. Acquiring the right companies will allow us to accelerate our growth plans. "We are the largest and most profitable DSP [board] company. Our strategy includes acquisition and merger and will include growth in new markets." Jinks refused to comment on whether talks about a takeover of Loughborough were under way. A takeover of Loughborough would be an almost perfect geographic complement to Spectrum's North American emphasis. The acquisition of 3L was in a complementary software area--an area that both Spectrum and Loughborough say will account for an increasing proportion of their respective businesses over time. But Jinks said the 3L move is also important as a first venture into Europe. Simon Yates, managing director of Loughborough Sound Images, dismissed the idea of a takeover of his company, saying: "Spectrum has been our distributor in North America for 10 years and that agreement was about to lapse at the end of July. We've extended it on a nonexclusive basis but we're now aggressively pursuing our own direct sales strategy in North America." Yates said a Delaware company had been incorporated and Loughborough Sound Images would open its first office in Boston at the end of July followed by one in San Jose, Calif., in November. (Next article.)
[This article comes from EE Times in a joint cooperative effort with the Motley Fool. For more articles like it, please look at Fool's Gold every weekend or simply go to the Fool's Gold Mine and page through our back issues, which all have clever and cool EE Times articles in them.]
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