AMCC to Acquire Cimaron Communications; Cimaron's Expertise in Framer/OHP Termination Devices to Expand AMCC's Already Broad Product Offering for SONET Systems
BusinessWire, Thursday, March 04, 1999 at 07:29
SAN DIEGO--(BUSINESS WIRE)--March 3, 1999--Applied Micro Circuits
Corp. (AMCC) (NASDAQ:AMCC), a leader in high-bandwidth silicon
connectivity solutions, Wednesday announced the signing of a
definitive agreement to acquire Cimaron Communications Corp., a leader
in the design and development of silicon solutions and ASIC cores for
high-speed SONET systems.
Under the terms of the agreement, AMCC will issue 3 million
shares of its common stock in exchange for all outstanding shares of
Cimaron preferred and common stock, including shares issuable upon
exercise of employee stock options and other rights. Based on AMCC's
closing price Tuesday of $38.50 per share, the transaction is valued
at approximately $115 million.
The merger transaction is expected to close in March and is
expected to be accounted for as a pooling of interests. The agreement
has been approved by the boards of directors of both companies. The
transaction is subject to certain customary closing conditions and
regulatory approvals.
Cimaron is a privately held company located in Andover, Mass.,
and is a premier provider of high-speed SONET framing technology. The
pending acquisition is a highly strategic, logical next step for AMCC,
and will substantially expand AMCC's available markets for high-speed
communications products.
Cimaron's framer expertise will enable AMCC to migrate beyond the
company's analog physical media devices (PMDs) and mixed-signal
physical-layer devices up into the next layer of the network protocol,
the digital layer.
The addition of Cimaron's framer and mapper expertise to AMCC's
proven expertise in silicon-based process technologies and mixed
signal capabilities illustrates AMCC's commitment to providing a broad
range of solutions for high-bandwidth communications markets.
"This acquisition is consistent with our strategy of providing
leading-edge solutions by adding higher-layer digital content to our
product portfolio," said Dave Rickey, president and chief executive
officer of AMCC. "With the acquisition of Cimaron, we anticipate that
AMCC will be able to offer to its customers an extensive, compatible
set of IC solutions for the high-bandwidth marketplace.
"Furthermore, we believe that our combined expertise in
high-speed CMOS mixed-signal design and digital systems knowledge will
provide an unparalleled platform for optimum integration in the
network."
"We're excited at the prospect of being a part of a company that
has such complementary objectives and goals," said Ram Sudireddy,
president of Cimaron Communications. "As a premier provider of
high-speed silicon framer/OHP termination devices for SONET systems,
this relationship with AMCC is a natural fit; we're looking forward to
passing on unparalleled value to our customers in the high-speed SONET
marketplace."
Cimaron will retain its corporate identity for the near term, and
will be referred to as an AMCC company. Cimaron has 35 employees, and
the company's operations will remain in the Andover office. Sudireddy
will report directly to Rickey.
AMCC designs, develops, manufacturers and markets
high-performance, high-bandwidth silicon solutions for the world's
communications infrastructure.
The company utilizes a combination of high-frequency,
mixed-signal design expertise and multiple silicon process
technologies to offer IC products for the telecommunications market
that address the SONET/SDH and ATM transmission standards and for the
data communications markets that address the Gigabit Ethernet, ATM and
Fibre Channel transmission standards.
AMCC's core technologies also address ATE and high-speed
computing needs. AMCC's corporate headquarters and wafer fabrication
facilities are located in San Diego. Sales and consulting engineering
offices are located throughout the world.
Cimaron designs, develops and markets highly complex digital
integrated circuits for mapping, framing and pointer process functions
in SONET and ATM applications.
Conference Call at 2 p.m. PST, March 3
To learn more about the transaction, you are invited to
participate in a teleconference briefing that will take place today,
March 3, at 2 p.m. PST. The call-in number is 888/836-6072. If you are
located outside the United States, you may call in on 703/736-7363. To
hear a playback of the teleconference briefing at your convenience,
call 888/266-2086. The reservation code for playback is 1365156.
For more information about AMCC, visit the company's Web site on
the Internet at amcc.com.
Forward-Looking Statements
Except for historical information contained herein, the matters
set forth in this news release are forward-looking statements that are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those set forth in the
forward-looking statements, including, but not limited to, such
factors as the rescheduling or cancellation of orders by customers;
fluctuations in the timing and amount of customer requests for product
shipments; fluctuations in manufacturing yields and inventory levels;
changes in product mix; the company's ability to introduce new
products and technologies on a timely basis; the introduction of
products and technologies by the company's competitors; the
availability of external foundry capacity, purchased parts, and raw
material; competitive pressures on selling prices; the timing of
investments in research and development; market acceptance of the
company's and its customers' products; the financial condition and
performance of the company's customers; the timing of depreciation and
other expenses to be incurred by the company in connection with the
expansion of its existing manufacturing facility and in connection
with its proposed new facility; the timing and amount of recruiting
and relocation expenses, prototyping costs and promotional expenses;
costs associated with future litigation, if any, including without
limitation, litigation relating to the use or ownership of
intellectual property; costs associated with compliance with
applicable environmental regulations; general semiconductor industry
conditions; and general economic conditions, including, but not
limited to, economic conditions in Asia and the risk factors that are
detailed in the company's Annual Report on Form 10-K for the year
ended March 31, 1998, the company's Quarterly Report on Form 10-Q for
the quarter ended Dec. 31, 1998, and the company's other filings with
the Securities and Exchange Commission.
NOTE TO EDITORS: AMCC is a registered trademark of Applied Micro
Circuits Corp. |
