MaxLinear to acquire Silicon Motion
MaxLinear and Silicon Motion have entered into a definitive agreement under which MaxLinear will acquire Silicon Motion in a cash and stock transaction that values the combined company at USD 8 billion in enterprise value.
In the merger, each American Depositary Share (ADS) of Silicon Motion, which represents four ordinary shares of Silicon Motion, will receive USD 93.54 in cash and 0.388 shares of MaxLinear common stock, for total per ADS consideration of USD 114.34.
The combination of the two companies is expected to drive transformational scale, create a diversified technology portfolio and significantly expand the combined company’s total addressable market.
“Today’s announcement celebrates the combination of two companies that have driven significant innovation in their respective industries for over a decade,” says Kishore Seendripu, Ph.D., Chairman and CEO of MaxLinear in a press release. “The enhanced scale of the combined organization creates a new significant $2B+ player in the semiconductor industry with compelling positions across a diversified set of end-markets. MaxLinear has demonstrated a strong track record of integration success and looks for this combination to create robust growth, impressive operating margins and significant cash flows.”
Combined revenues are expected to be more than USD 2 billion annually and are supported by the technology breadth to address a total market opportunity of roughly USD 15 billion. The combined scale is expected to provide additional technology, resources, and capabilities to accelerate product innovation, improve operational efficiency and drive lower manufacturing costs.
“For 20 years, we have built Silicon Motion with a commitment to advancing innovation, partnering with all of our valued customers and supporting our colleagues around the world,” adds Wallace Kou, President and Chief Executive Officer of Silicon Motion and continues. “Combining Silicon Motion with MaxLinear creates significant economies of scale, accelerates our expansion into enterprise storage markets and unites unparalleled intellectual property to continue serving our customers with high-quality expertise and technical support. This transaction will deliver compelling value for shareholders, position our company to achieve our growth objectives and advance our position in high-growth storage end markets.”