Product category: Communications ICs (Wired)
News Release from: IDT
Edited by the Electronicstalk Editorial Team on 24 June 2005
IDC and ICT to come together
Integrated Device Technology and Integrated Circuit Systems have signed a definitive agreement to combine the two companies in a strategic merger
The parties believe that the merger will allow the combined company to increase its ability to service the requirements of its customers and will provide a platform for growth within the communications, computing, and consumer markets. Under the terms of the merger agreement, which has been unanimously approved by the boards of directors of both companies, ICS stockholders will receive 1.3 shares of IDT common stock and $7.25 of cash for each share of ICS stock.
This article was originally published on Electronicstalk on 24 June 2005 at 8.00am (UK)
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Based on closing prices as of 15th June 2005, this total consideration values ICS at approximately $1.7 billion or $23.54 per share.
'IDT has established a solid reputation for developing vital semiconductor solutions targeting various communications infrastructure applications, including wireline, wireless and enterprise', said Greg Lang, IDT President and Chief Executive Officer.
'Likewise, ICS has excelled in providing timing technology to consumer, PC and DIMM customers'.
'We believe that the merger will enable customers to benefit from a stronger company with a diverse product portfolio and enhanced resources'.
'The merged company will have an outstanding base of technology, customers and talent to pursue growth opportunities in communications, computing, and consumer market segments'.
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'Combining our resources will allow us to pursue these opportunities more effectively than we could as separate entities'.
'From a financial perspective, the transaction will be accretive to IDT's fiscal year 2007 earnings per share', Lang continued.
'IDT's existing manufacturing infrastructure is an excellent fit to the products and roadmap of ICS; we believe that capturing related efficiencies will allow the combined company to increase its ability to deliver innovative solutions to its customers as well as value to its stockholders'.
'Combining IDT with ICS will allow us to complement our strength in timing devices for consumer and computing customers with IDT's leadership in a wide range of communications products', said Hock Tan, President and Chief Executive Officer of ICS.
'IDT's track record of solutions support and its position and technology in the communications market, are a good complement to our timing and circuit expertise'.
'I am confident that the merged company will deliver superior solutions to our customers and value for our stockholders than either company could independently'.
Lang will serve as President and Chief Executive Officer of the combined company and Tan will assume the role of Chairman of the Board of the combined company, with an executive role in the integration of ICS with IDT.
The board of directors of the combined company will have nine members, with IDT designating five directors, including Lang, and ICS designating four directors, including Tan.
For the 12 months ending 31st March 2005, the combined company had revenues of approximately $645 million and generated $86 million in cash flow.
The combined company will retain the IDT name and its stock will continue to trade on the Nasdaq national market under the ticker symbol 'IDTI'.
The merged company will be headquartered in San Jose, California.
Based on the most recent capitalisation, current IDT stockholders will own approximately 54% and current ICS stockholders will own approximately 46% of the combined company.
The transaction is subject to customary closing conditions, including shareholder and regulatory approvals, and is expected to be completed in the fall of 2005.
IDT and ICS directors and executive officers have entered into voting agreements pursuant to which they have agreed to vote their shares in favour of the transaction.
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