AMIS acquisition continues analogue expansion

AMIS will immediately contribute new products and capabilities in medical and military/aerospace markets.

ON Semiconductor is set to acquire AMIS Holdings, the parent company of AMI Semiconductor, in an all-stock transaction with an equity value of approximately US $915 million.

"The acquisition of AMIS furthers the transformation of ON Semiconductor into an analogue and power solutions leader with enhanced scale, higher value and higher margin products, deep customer relationships and an expanded addressable market", says Keith Jackson, ON Semiconductor President and CEO.

"Combining ON Semiconductor's leading standard products and advanced manufacturing infrastructure with AMIS's growing standard products business and substantial custom product portfolio will enable the combined company to more comprehensively address our customers' needs".

"AMIS will immediately contribute exciting new products and capabilities in the medical and military/aerospace markets and will complement our existing automotive and industrial businesses", says Jackson.

"Over time, we plan to leverage the advanced submicron capabilities of our Gresham, Oregon, fabrication facility to achieve operational synergies and extend AMIS's high-voltage and low-power offerings".

"This transaction represents a compelling opportunity for AMIS employees, customers and shareholders by combining the outstanding manufacturing excellence of ON Semiconductor with the world class mixed-signal design talent of AMIS", says Christine King, CEO of AMIS.

"We believe AMIS shareholders will not only benefit from the initial premium represented by the purchase price, but also from a significant post-merger ownership in a combined ON Semiconductor/AMIS company that is expected to have enhanced growth, cash flow and profitability prospects".

"Through the combination, our employees will have access to a more complete technology roadmap and capabilities as well as the opportunity to serve our customers with a wider array of products; either custom or standard", adds King.

The companies expect the transaction to close in the first half of 2008.

"In addition to the strategic benefits, the acquisition provides compelling financial opportunities", says Donald Colvin, ON Semiconductor Executive Vice President, CFO and Treasurer.

"We have identified significant operational and manufacturing cost synergies, up to $50 million in pre-tax savings in 2009 that may be achieved through the integration of AMIS and rationalisation of our combined infrastructure".

"We expect to begin to realise these synergies within two quarters of closing the transaction".

"With these cost savings, and excluding the impact of amortisation expense, we expect the acquisition will be accretive to our earnings per share exiting 2008".

"The combined company would also have latest twelve months cumulative revenues of greater than $2 billion and latest twelve months cumulative EBITDA of greater than $500 million".

"We believe the strong EBITDA of the combined company, along with the rationalisation of our capital expenditures and utilisation of our tax losses will enable the combined company to generate significant cash flow for our shareholders".

"We have also identified potential revenue synergies that, while we are not counting on them to make this acquisition accretive, provide exciting opportunities for further enhancing our combined revenue growth".

ON Semiconductor President and CEO Keith Jackson will serve as President and CEO of the combined company.

Corporate headquarters will remain in Phoenix, Arizona, with a significant presence maintained in Pocatello, Idaho, Belgium and various other locations worldwide.

ON Semiconductor Nonexecutive Chairman J Daniel McCranie will continue as Nonexecutive Chairman of the Board of Directors of the combined company, which will be expanded to eight members with the addition of Christine King, CEO of AMIS.

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