Deal at a Glance

Mindspeed Technologies to Acquire Picochip

Transaction:
Mindspeed Technologies, Inc. (NASDAQ: MSPD), a leading supplier of semiconductor solutions for network infrastructure applications, to acquire U.K.-based Picochip Limited, the leading supplier of integrated system-on-chip (SoC) solutions for small cell base stations.

Transaction Rationale:

Creates the clear market leader in 3G/4G small cell solutions for next generation mobile networks, an explosive growth opportunity
Combines 70% share in 3G/HSPA small cell market with the largest long-term evolution (LTE) small cell design engagement pipeline Expected to expand Mindspeeds total addressable market (TAM) to $3.0 billion by calendar 2016; small cell market expected to grow at 98% CAGR from 2012-2016

Strong technology synergies and customer alignment

Combined portfolio will offer comprehensive support for all 3G/4G mobile broadband air interface standards Strong customer alignment coupled with combined carrier relationships will create compelling revenue synergies

Drives scale advantages

One of the largest small cell infrastructure SoC and software development groups in the industry Creates intellectual property (IP) scale, coupled with critical wireless carrier deployment experience Broadest small cell SoC offering on the market; from residential to enterprise to pico/metro

Expected to be nancially compelling

Accelerates revenue growth Accretive to earnings in the second half of calendar 2012

Consideration:

Total Purchase Price: Cash: Shares: Earnout:

$51.8 million* $27.5 million 5.19 million new shares of Mindspeed common stock (~15% of outstanding Mindspeed shares) Purchase price can increase up to $25 million, contingent on achievement of certain milestones. If earned, the earnout is payable in the rst quarter of calendar year 2013 Cash portion of the transaction will be nanced in part with a new senior secured credit facility provided by Silicon Valley Bank First quarter of calendar year 2012

Financing:

Expected Closing:

About Mindspeed:

Mindspeed Technologies Inc. is a leading provider of network infrastructure semiconductor solutions to the communications industry. The companys low-power SoC products are helping to drive video, voice and data applications in worldwide ber-optic networks and enable advanced processing for 3G and LTE mobile networks. The companys high-performance analog (HPA) products are used in a variety of optical, enterprise, industrial and video transport systems. Mindspeeds products are sold to original equipment manufacturers (OEMs) around the globe. www.mindspeed.com

About Picochip:

Picochip is the leading supplier of core technology for femtocells and small cells, and its picoXcell 3G solutions are the worlds single most common base station technology. The companys portfolio of proven SoC solutions and complete reference designs spans from low-cost residential through small ofce, enterprise, to metropolitan and rural femtocells and carrier-class picocells. www.picochip.com

* based upon closing price of Mindspeed common stock on January 4, 2012.

Frequently Asked Questions

1. How will stockholders benet from this transaction?

Mindspeed Technologies to Acquire Picochip

This combination is nancially compelling. It creates the clear leader in 3G/4G small cell solutions for next generation mobile networks, an explosive growth opportunity. It signicantly expands Mindspeeds estimated TAM to $3.0 billion by calendar year 2016 and accelerates its revenue growth. There are strong operating synergies between the two companies and Mindspeed expects the transaction to be accretive to non-GAAP earnings per share in the second half of calendar year 2012. Mindspeed also expects to benet from strong technology synergies, customer alignment and scale advantages associated with the transaction. 2. How will customers benet from this transaction? The combined companys comprehensive technology base and complementary skills in wireless systems and software will enable it to drive the most compelling product roadmap for multi-mode 3G/4G solutions going forward. By combining research & development (R&D) resources, Mindspeed will have one of the largest small cell software, systems and SoC development groups in the wireless infrastructure sector, with the complementary IP scale and expertise to deliver the advanced solutions this fast-moving market demands. This will enable customers to fully capitalize on the rapid acceleration of the small cell market as the industry moves toward xed/mobile broadband convergence. 3. How does this transaction further Mindspeeds strategic objectives? Mindspeeds clearly articulated strategic objective is to become a global leader in wireless infrastructure technology for next generation mobile broadband communications. This pivotal transaction rmly positions Mindspeed as the market leader in small cell base station semiconductor and software solutions. Together, Picochip and Mindspeed will have the number one position in deployed small cell processors worldwide with 70 percent market share in 3G/HSPA deployments, the largest LTE small cell design engagement pipeline and the only Time Division Synchronous Code Division Multiple Access (TD-SCDMA) SoC on the market. This combination will offer the broadest portfolio of small cell SoC solutions available today and Mindspeed will be positioned to help OEMs and carriers seamlessly transition to next generation multi-mode 3G/4G small cell solutions. 4. How will this transaction expand Mindspeeds total addressable market (TAM)? Management estimates the total addressable market for the combined company will grow to $3.0 billion by calendar year 2016. The small cell market is expected to grow at a compound annual growth rate (CAGR) of 98% between calendar 2012 and 2016. Picochip pioneered the femtocell market and, according to ABI Research, is the clear market leader today. We believe the combination of Mindspeed and Picochip will offer the most comprehensive portfolio of small cell semiconductor solutions on the market. Mindspeeds enhanced product roadmap for single and multi-mode 3G/4G solutions will enable it to fully capitalize on the rapid acceleration of the small cell wireless base station market, while also addressing comprehensive support for all 3G and 4G global air interface standards. 5. What are the operating and revenue synergies resulting from this transaction? What is the time frame to realize them? There are strong operating synergies between the two companies. Following the transaction close, management expects to reduce COGS through volume driven improvements in wafer and packaging pricing, and to reduce operating expenses by rationalizing overlapping functions, largely in SG&A. Mindspeed also expects to realize capital expenditure savings through leveraging shared resources, intellectual property and the development and test equipment of the combined companies. The majority of these savings are expected to be realized as we enter the second half of calendar year 2012. Mindspeed expects revenue acceleration as it leverages the combined product mixes, sales forces and customer bases with the most signicant revenue acceleration occurring in calendar 2013 and beyond as the small cell market ramps signicantly.

Contact Informaon:
Andrea D. Williams Investor Rela ons Mindspeed Technologies, Inc. 4000 MacArthur Blvd., East Tower Newport Beach, CA 92660-3007 PH: +1 949-579-3111 andrea.williams@mindspeed.com
This document contains forward-looking statements within the meaning of Sec on 27A of the Securi es Act of 1933, as amended, and Sec on 21E of the Securi es Exchange Act of 1934, as amended. Such statements include statements regarding our expecta ons, goals, and inten ons with respect to the proposed acquisi on of Picochip. Forward-looking statements include, among others, statements concerning the impact of the acquisi on on our future opera ng results; an cipated cost savings; an cipated growth in the addressable markets for Mindspeed and Picochip as a combined en ty; the market leadership posi on of the combined en ty; and other poten al synergies arising from the acquisi on. Forward-looking statements are subject to substan al risks and uncertain es that could cause actual results and events to dier materially from those stated in the forward-looking statements. In par cular, we cannot provide any assurances that the an cipated revenue and expense synergies of the proposed acquisi on will be achieved or that the markets for the products of the combined companies will develop as we currently an cipate. Acquisi on transac ons are subject to inherent risks and uncertain es, including, among others, risks associated with the successful integra on of geographically separate organiza ons; the ability to integrate the two companies technologies; the poten al for employee a ri on; and the various risks and uncertain es associated with doing business in interna onal markets. Our exis ng business is also subject to numerous risks and uncertain es independent of the proposed acquisi on, including uctua ons in our opera ng results and future opera ng losses; loss of or diminished demand from one or more key customers or distributors; our ability to successfully develop and introduce new products; pricing pressures; and the poten al for intellectual property li ga on. Addi onal risks and uncertain es that could cause our actual results to dier from those set forth in any forward-looking statements are discussed in more detail under the cap on Risk Factors in our Annual Report on Form 10-K for the scal year ended September 30, 2011 and in our future lings with the SEC.