Intersil Agrees to Buy Xicor In $529 Million Deal
Monday March 15, 1:01 am ET
MILPITAS, Calif. -- Chip maker Intersil Corp. (NasdaqNM:ISIL - News) agreed to buy memory-chip maker Xicor Inc. (NasdaqNM:XICO - News) for about $529 million in cash and stock in a deal that expands Intersil's portfolio of standard analog products.
The deal values Xicor at about $15.58 a share, a 13% premium based on Friday's closing prices of $13.74 for Xicor and $22.63 for Intersil.
In a prepared statement late Sunday, Intersil said Xicor shareholders will receive the value of $8 in cash plus 0.335 shares of Intersil common stock for each Xicor share.
Xicor shareholders can elect to receive all cash, stock, or a combination of cash and stock, subject to proration based on the total cash and shares available in the transaction, Intersil said.
Intersil said the combined company will have a "highly profitable operating model that also generates significant cash." Intersil and Xicor both exited 2003 with gross margins topping 56% and positive cash flow from operations.
Intersil also said it expects to improve its cost structure through the consolidation with Xicor. With the cost savings and excluding the impact of amortization expenses, Intersil said it expects the acquisition will have no impact on its 2004 earnings per share and will be accretive to its 2005 earnings per share.
The boards of both companies have approved the transaction, which is subject to customary regulatory approvals and a Xicor shareholder vote.
Intersil said it expects to complete the acquisition by the end of the second quarter of calendar 2004.
After the transaction, Intersil will have about 156 million fully diluted shares outstanding, with current Intersil shareholders owning about 92% and current Xicor shareholders owning about 8% of the combined company's shares.
Piper Jaffray & Co. served as financial adviser to Intersil on the transaction, and Wachovia Securities served as financial adviser to Xicor.
biz.yahoo.com |
