Product category: Analogue and Mixed Signal ICs
News Release from: Intersil
Edited by the Electronicstalk Editorial Team on 23 March 2004
Xicor acquisition to
expand analogue portfolio
Intersil has signed a definitive agreement to acquire Xicor, expanding its portfolio of high growth, standard analogue products
Under the terms of the agreement, each Xicor shareholder will receive the value of $8.00 per share in cash and 0.335 a share of Intersil common stock (equivalent to $15.58 per share of Xicor stock, based on the closing price of Intersil stock on 12th March 2004). Each Xicor shareholder may elect to receive all cash, stock, or a combination of cash and stock, subject to proration based on the total cash and shares available in the merger.
This article was originally published on Electronicstalk on 23 March 2004 at 8.00am (UK)
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This reflects an aggregate purchase price of approximately $529 million.
The transaction combines two strong high performance analogue companies and significantly strengthens Intersil's portfolio of general-purpose standard analogue solutions.
Xicor is a leader in digital potentiometers and system management products that complement Intersil's current standard analogue portfolio.
Xicor also has a rapidly expanding portfolio of real time clocks, voltage references, power sequencing and display products that provide a natural extension to Intersil's leadership position in the computing power management and flat panel display markets.
This will be the second analogue acquisition for Intersil, which acquired Elantec Semiconductor in May 2002.
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In addition to the compelling strategic opportunity that this acquisition provides, the combined company will have a highly profitable operating model that also generates significant cash.
Both companies reported strong revenue growth in 2003, and with a combined investment of 19% of sales in research and development, the combined company is well positioned to continue to outperform the analogue industry.
Intersil and Xicor both exited 2003 with gross margins over 56% and positive cash flow from operations.
Demonstrating its ongoing commitment to improved profitability, Intersil also expects to improve its cost structure through the consolidation of the two companies.
With these cost savings and excluding the impact of amortisation expenses, Intersil expects the acquisition to have no impact to its 2004 earnings per share and to be accretive to its 2005 earnings per share.
"Xicor is a recognised leader in standard products for the high performance analogue market", said Rich Beyer, Intersil's President and CEO.
"Following the acquisition of Elantec and our divestiture of the wireless networking business, the acquisition of Xicor further solidifies our position as a pure-play high-performance analogue company.
The addition of Xicor's exceptional management team, its deep analogue expertise, and its outstanding standard analogue product portfolio will greatly strengthen and diversify Intersil's position in the high margin, general purpose standard analogue market.
Furthermore, we believe that combining these businesses will allow Intersil to more rapidly achieve its long term profitability model".
"We are very pleased to join Intersil's team", said Lou DiNardo, Co-Chairman, President and CEO of Xicor.
"This business combination will result in a very powerful value proposition to customers, investors and employees".
On the close of the transaction, DiNardo will serve as Intersil's Executive Vice President of Standard Linear Products.
The boards of directors of both companies have unanimously approved the definitive agreement.
The transaction is subject to customary regulatory approvals and a Xicor shareholder vote, and is expected to close by the end of the second quarter of calendar 2004.
After the transaction, Intersil will have approximately 156 million fully diluted shares outstanding, with current Intersil shareholders owning approximately 92% and current Xicor shareholders owning approximately 8% of the combined company's shares.
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