Monday, June 1, 2009

NetLogic Microsystems to Merge with RMI Corporation

MOUNTAIN VIEW, Calif. & CUPERTINO, Calif.--(BUSINESS WIRE)--NetLogic Microsystems, Inc. [NASDAQ:NETL], a leader in the design and development of knowledge-based processors and high-speed integrated circuits, and RMI Corporation, a leading provider of high-performance and low-power multi-core, multi-threaded processors, today announced that they have entered into a definitive agreement to merge. Under the terms of the agreement, NetLogic Microsystems will pay the stockholders of RMI Corporation a combination of cash and shares of NetLogic Microsystems’ common stock at the closing date, and subject to the attainment of earn- out objectives applicable to the acquired business during the 12-month period following the closing date, may pay additional cash and shares to the RMI stockholders. The amount of cash and shares for the consideration paid upon closing and for the earnout, if any, will both be determined based on the average closing price of NetLogic Microsystems stock for the 20-trading day period in which the last day will be the third trading day prior to the closing, subject to an agreed-upon collar. The estimated number of shares of common stock to be issued on the closing date is between 5.1 million shares to 6.5 million shares of NetLogic Microsystems common stock to the preferred shareholders of RMI Corporation, and at the closing price of $32.72 on May 29, 2009, the aggregate value of the shares that would be issued on the closing date would be approximately $175.4 million. Fifty percent of the shares payable upon closing will be subject to a six-month lockup and the other fifty percent will be subject to a twelve-month lockup from the closing date. Based on the closing price of NetLogic Microsystems common stock on May 29, 2009 of $32.72, the estimated amount of cash to be paid on the closing date is $8.0 million. Additionally, if the maximum earnout is achieved, the range of additional NetLogic Microsystems common shares to be issued would be between 1.6 million to 2.5 million shares, and, at the $32.72 per share closing price of NetLogic Microsystems common stock on May 29, 2009 the estimated additional amount of cash to be paid at full achievement of the earnout would be $6.5 million. A portion of the consideration payable to the stockholders of RMI will be placed into escrow pursuant to the terms of the definitive agreement. NetLogic Microsystems will also grant common stock, restricted stock units and stock options to employees of RMI who join NetLogic Microsystems following the close of the merger. The estimated amount of common stock and restricted stock units is between 1.1 million and 1.5 million shares as well as between 1.5 million and 2.0 million shares of employee stock options. NetLogic Microsystems will not be assuming any current RMI Corporation employee’s stock options or shareholder warrants. The transaction has been approved by the board of directors of each company, and the holders of a majority of RMI Corporation’s shares have consented to the transaction, as well. The closing of the transaction remains subject to closing conditions, including the approval by the stockholders of NetLogic Microsystems of the issuance of the shares of common stock to be issued in the transaction and required regulatory filings and reviews. NetLogic Microsystems expects the transaction to close by the end of the third quarter of 2009.