Micrel Says It Plans to Buy Kendin Communications
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SAN JOSE, Calif. (Reuters) - Chipmaker Micrel Inc. (NasdaqNM:MCRL - news) announced on Friday plans to buy Kendin Communications Inc. for $215 million in stock, a move it said would accelerate momentum for its new products in the communications industry.
San Jose, Calif.-based Micrel also said it expects to take acquisition-related charges in the June quarter of between $8 million to $10 million, and warned second-quarter sales could come in up to 25 percent below first quarter results.
Micrel said it will issue about 6.2 million shares of its common stock and options in exchange for all outstanding securities and options of closely held Kendin.
Kendin, founded in 1995, is based in Sunnyvale, Calif., and has 72 employees, including about 40 engineers. It had 2000 sales of $24 million and about $10 million in the first quarter of 2001, Micrel said.
The transaction is expected to be completed in the quarter ending June 30, subject to customary regulatory approvals, and is intended to be accounted for as a pooling-of-interests.
Micrel said the deal is expected to add modestly to its earnings per share beginning in the third calendar quarter of 2001.
Micrel shares rose 95 cents, or 2.72 percent, to $35.90 on the Nasdaq, well off is year-high of $76.63, though up from its year-low of $22.94.
On April 19, Micrel reported first-quarter net income that fell 20 percent to $11 million, or 12 cents a share, from $14.2 million, or 15 cents, a year ago. Sales declined to $64.9 million, from $67.3 million.
Micrel also said that, due largely to canceled orders as a result of the slowing U.S. economy, second-quarter sales will likely fall as much as 25 percent below the first quarter's. |
