Intersil: Looking Up
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Wireless networking chip maker Intersil of Irvine, CA, has completed its acquisition of flat panel display and optical storage (CD and DVD recordables) vendor Elantec Semiconductor, two months after announcing the deal. Elantec will become a fourth product group for Intersil, along with the company's Standard Analog, Communications Analog, and Wireless Access groups.
Each share of Elantec stock was converted to 1.24 shares of Intersil common stock, plus $8.00 cash from working capital. According to Dow Jones Business News, Intersil's first quarter sales were $134.1 million before adding Elantec, and would be $159.5 million with Elantec included.
Last week, Intersil's stock rallied 4.5 percent on news that it would join the S&P MidCap 400 Index following the Elantec acquisition. With the merger now complete, Intersil's stock was rated a "strong buy." Intersil's stock was down this morning from close yesterday at $30.21.
Just yesterday, Intersil lost a major customer when D-Link announced it was going with Texas Instruments as the supplier of chips for its 802.11b-based product line to bring down costs and add new features.
With the $1.4 billion acquisition complete, Elantec's president and CEO Rich Beyer is now president and CEO of Intersil Corporation, as former Intersil CEO Greg Williams moves to executive chairman of the company's board of directors. Beyer also joins the board, along with Elantec's former chairman and former CEO, Jim Diller. The board goes from seven to eight members.
Intersil's Beyer announced that by acquiring Elantec and now working in several markets with accelerated adoption rates, that Intersil will commit a $140 million investment to research and development, and will introduce over 150 new products this year.