The $1.4 billion merger between WLAN chipset maker Intersil Corp. and Elantec Semiconductor received early anti-trust clearance
from the Federal Trade Commission (FTC).
The federal regulatory body has granted an early end to the applicable
antitrust waiting period, saying it saw no anti-competitive problems with
the
planned acquisition, which was announced earlier this month.
The cash and stock deal, which is part of a move by Intersil to expand into
high-growth analog markets, would create one of the biggest chip companies
in the U.S but, by granting early clearance, the FTC said it found no
antitrust issues.
Intersil, which competes head-to-head with Analog Devices and Texas
Instruments, makes high-speed wireless LAN chipsets and other integrated
circuits (ICs). The company’s major clients include Cisco, Compaq, IBM,
Nokia, and Sony.
The Elantec purchase, which is seen as the jewel in Intersil’s wireless
crown, would create a company with a solid balance sheet of more than $550
million in cash, according to Intersil CFO Dan Heneghan. The combined firm
would be free of debt.
Under terms of the transaction, the Irvine, CA-based Intersil would pay
Elantec shareholders 1.24 shares of Intersil stock and $8.00 in cash for
each Elantec share. Based on Intersil’s closing price of $36.65 per share on
March 8, 2002, the exchange ratio is 1.458 shares of Intersil stock for each
Elantec share.
Intersil said the deal, which was driven by the increase demand for wireless
products, was valued at approximately $1.4 billion and represents a 15
percent premium to the 30-day average exchange ratio of Elantec and Intersil
stocks.
Intersil CEO Greg Williams assume the post of executive chairman of the
board of the combined entity. Williams’ responsibilities would include
hammering out the company’s corporate, wireless and analog strategy while
Elantec’s chief executive Rich Beyer would serve as president and CEO of
Intersil.
The transaction is the third acquisition for Intersil, which previously
acquired two wireless companies.
Elantec, a provider of high performance analog ICs, is a player in the
optical storage (CD read/write & DVD recordable) and flat panel display
markets.
Intersil said the purchase adds Elantec’s expertise in analog optical
storage and flat panel Displays. “In addition, Elantec’s product offerings
in communication ICs and standard analog will strengthen Intersil’s
portfolio of analog ICs.”
