Electronics Production |
SMSC to acquire Conexant Systems
SMSC has signed a definitive agreement to purchase all of the outstanding shares of Conexant in a stock and cash transaction valued at approximately USD 284 million including the assumption of Conexant’s net debt. The transaction has been approved by the boards of directors of both companies.
"We believe that combining the growth potential of Conexant and SMSC will allow us to leverage complementary technology and engineering resources to provide our customers with expanded solutions in connectivity and content", said Christine King, President & CEO of SMSC.
"In our industry, size and scope provide a significant advantage with customers and suppliers. SMSC and Conexant share similar core competencies in analog and mixed-signal design, possess complementary product portfolios, and count many customers in common. By joining forces, we get the opportunity to take advantage of economies of scale and drive profitable growth. I am convinced that combining our companies will best serve the interests of Conexant stockholders, customers, and employees moving forward", said Scott Mercer, Conexant's Chairman and CEO.
Sailesh Chittipeddi, currently President & COO at Conexant, will join SMSC upon close of the acquisition as Executive Vice President, reporting to Christine King. Mr. Chittipeddi’s responsibilities will include all product lines and global marketing and engineering functions for SMSC. Mr. Chittipeddi joined Conexant in 2006. In his role as President & COO, he had worldwide responsibility for engineering, operations, quality and marketing.
Headquartered in Newport Beach, California, Conexant has approximately 600 employees worldwide, including over 230 in Asia.
Under the terms of the agreement, for each share of Conexant that they own, Conexant stockholders will receive approximately USD 2.25 consisting of USD 1.125 in cash and a fraction of a share of SMSC common stock equal to USD 1.125 divided by the volume weighted average price of SMSC common stock for the 20 trading days ending on the second trading day prior to closing, but in no event more than 0.04264 nor less than 0.03489 shares of SMSC common stock.
The total cash consideration to be paid in the transaction is approximately USD 98 million and the total number of shares of SMSC common stock to be issued (including the assumption of outstanding Conexant restricted stock units) is approximately 2.9 - 3.6 million. The transaction is expected to close in the first half of calendar 2011 subject to the satisfaction of regulatory requirements, approval by Conexant shareholders and other customary closing conditions.
