Microsemi is offering to acquire Zarlink Semiconductor for CAD $3.35 per share in cash. The proposed transaction has a total equity value of USD $548.7 million based on a fully diluted share count and represents a 40% premium to Zarlink’s share price as of July 19, 2011, and a 43% premium to Zarlink’s trailing 30 day average share price. The CAD $3.35 proposal exceeds every Zarlink closing share price over the last five years.
Microsemi has sent a letter to Zarlink’s board of directors outlining its proposal. The proposal follows several earlier attempts by Microsemi to engage in private discussions with Zarlink, including two written proposals to Zarlink’s board of directors. Both proposals, including the most recent one made on June 17, 2011 proposing an all-cash purchase price per share in a negotiated transaction of between CAD $3.25 and $3.55, were rejected by Zarlink without discussion.
The acquisition is expected to be immediately accretive to Microsemi’s earnings per share even before the realization of any synergies. Morgan Stanley Senior Funding, Inc. and Microsemi have executed a financing commitment letter to ensure that the required funds are available to finance the acquisition on an all-cash basis, and Microsemi has retained Stifel Nicolaus Weisel and Morgan Stanley & Co. LLC as its financial advisors.
About Zarlink Semiconductor
- Designs mixed-signal semiconductor products
- Core capabilities are network timing, voice over cable and broadband, and ultra low-power wireless communication
- Products are ideal for communications and medical applications
- Their highly integrated chip solutions help customers simplify design, lower costs and reach market quickly
- Offers over 900 active products
- Ships about 100 million ICs per year to over 400 customers
- Headquartered in Ottawa, Canada