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Components | July 20, 2011

Microsemi makes offer on Zarlink Semiconductor

Microsemi has made a proposal to the board of directors of Zarlink Semiconductor (Zarlink) to acquire all of the outstanding shares of the Company for CAD 3.35 per share in cash.

The proposed transaction has a total equity value of USD 548.7 million based on a fully diluted share count and represents a 40 percent premium to Zarlink's share price as of July 19, 2011, and a 43% premium to Zarlink's trailing 30 day average share price. The CAD 3.35 proposal exceeds every Zarlink closing share price over the last five years. Microsemi's proposal recognizes the recent efforts of Zarlink and its employees to stabilize its business, and provides the opportunity for Zarlink to benefit from Microsemi's management expertise, technology leadership, and sales platform. Microsemi has sent a letter to Zarlink's board of directors outlining its proposal. This proposal follows several earlier attempts by Microsemi to engage in private discussions with Zarlink, including two written proposals to Zarlink's board of directors. Both proposals, including the most recent one made on June 17, 2011 proposing an all-cash purchase price per share in a negotiated transaction of between CAD 3.25 and 3.55, were rejected by Zarlink without discussion. "We remain interested in engaging with Zarlink's board to complete a transaction that delivers value to shareholders," said James J. Peterson, Microsemi president and chief executive officer. "We are committed to building and strengthening its business, and believe our proposal provides a superior outcome for Zarlink's shareholders, employees, customers, and the local economy." Headquartered in Ottawa, Canada, Zarlink designs mixed-signal semiconductor products for a range of communications and medical applications. Zarlink offers more than 900 active products, and ships approximately 100 million ICs per year to over 400 customers. "We believe this proposed acquisition provides considerable growth opportunities, and greatly benefits the shareholders of both companies," added Peterson. "Zarlink's shareholders will receive a substantial premium, in cash, and without execution or macroeconomic risk, while Microsemi's shareholders will benefit from the integration of this highly accretive opportunity."
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