WLAN chipset maker Intersil Corporation
announced the acquisition of Elantec Semiconductor in a deal worth about $1.4 billion.
The Irvine, CA-based Intersil, which provides system-level services for the
wireless networking and communications analog markets, said the cash and
stock deal is part of a move to expand into high-growth analog markets.
Under terms of the transaction, Elantec shareholders will receive 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
Intersil CEO Greg Williams would serve as executive chairman of the board of
the combined entiry. He will concentrate on corporate, wireless and analog
strategy while Elantec’s chief executive Rich Beyer will become 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 and Elantec share a significant number of customers and have
complementary product portfolios. In addition, both companies share a
fundamental vision of providing system level value for their target markets.
Elantec will be the third acquisition for Intersil, having previously
acquired two wireless companies,” the companies said in a statement.
Intersil chief financial officer Dan Heneghan said the combined firm would
have a solid balance sheet, with greater than $550 million in cash after the
Transaction and no debt.
Intersil, which is partnering with enterprise networking leader Cisco Systems Inc.
to develop high-speed WLAN client adapter reference designs
that comply with the 802.11g standard, said it operated profitably during
the 2001 downturn, adding that demand for its products “is accelerating with
orders running above expectations in each of our product lines.”
“In addition to the compelling strategic opportunity, Intersil expects the
acquisition to result in cost savings through the consolidation of the two
companies. With these cost savings and excluding the impact of amortization
expenses, Intersil expects the acquisition to be accretive to its 2003
earnings per share,” the company said.
Intersil, which focuses on high data rate wireless connectivity, power
management and wireless and wired communications infrastructures, 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.”