US chip maker Microsemi has launched a US$389m cash tender offer for its Californian peer Vitesse Semiconductor to gain scale in the communications market.
The US$5.28 per share deal represents a 32% premium on the group’s average stock price in the…
US chip maker Microsemi has launched a US$389m cash tender offer for its Californian peer Vitesse Semiconductor to gain scale in the communications market.
The US$5.28 per share deal represents a 32% premium on the group’s average stock price in the run up to the offer, and Vitesse now has until 8 April to solicit a superior counterbid.
The deal will see Microsemi, which is largely known as a military supplier although its chips are also used in commercial satellites, expand further into the growing ‘internet of things’ (IoT) sector.
Vitesse’s products target markets including mobile access/IP edge, enterprise cloud access, and industrial-IoT networking.
James Peterson, Microsemi’s chairman and CEO, said: “This acquisition is further evidence of Microsemi’s continuing commitment to grow as a communications semiconductor company.
“Vitesse’s highly complementary technology suite will expand our product offering and accelerate growth with differentiated technology in emerging markets, while benefitting from the increased scale, consolidated infrastructure and cost savings of the combined entity.”
BofA Merrill Lynch is providing customary committed debt financing for the acquisition, and is also financially advising Microsemi along with RBC Capital Markets. O’Melveny & Myers is serving as legal adviser.
Vitesse hired Deutsche Bank and Needham & Company for financial advice, and Stubbs Alderton & Markiles as legal adviser. Deutsche Bank is also assisting Vitesse with its ‘go shop’ process.
The deal is the latest in a raft of acquisitions in the semiconductor market in recent years, as companies pool their resources to gain scale in an increasingly competitive market.
Last month, US set-top box circuitry provider MaxLinear acquired local fabless semiconductor developer Entropic for US$287m.
