Tuesday, August 18, 2009

Virage Logic Announces Intent to Acquire ARC International

FREMONT, Calif., Aug 18, 2009 (BUSINESS WIRE) -- Virage Logic Corporation (NASDAQ:VIRL), the semiconductor industry's trusted IP partner, today announced its intent to acquire publicly held ARC International plc (LSE:ARK), a leading provider of consumer IP to OEM and semiconductor companies globally. The proposed acquisition would expand Virage Logic's ability to serve the global semiconductor market by complementing its existing portfolio of physical IP and standards-based advanced interface IP with ARC's widely accepted processor IP, a necessary component for complex System-on-Chip (SoC) integrated circuits.

The proposed all-cash transaction values ARC at 16.25 pence per share, or an equity value of approximately £25.2 million ($41.0 million) on a fully-diluted basis. The Directors of ARC have recommended unanimously that ARC's shareholders accept the offer. Virage Logic expects that the offer document will be mailed to ARC shareholders shortly. The offer period will extend for a minimum of 21 days from the date the offer document has been mailed, and the transaction is expected to close by the end of Virage Logic's first fiscal quarter of 2010, which ends on December 31, 2009. The offer is subject to certain limited closing conditions, including that at least 90% of the ARC shares have been tendered into the offer.

On a non-GAAP basis, which excludes the effects of FAS123R stock compensation expense, restructuring, and amortization of intangible assets and acquisition related charges, Virage Logic expects the proposed acquisition to be accretive between $0.10 and $0.14 earnings per share to fiscal year 2010. Immediately following the closing of the acquisition, Virage Logic expects to have a cash balance of approximately $20 - $23 million.

Cowen and Company, LLC and Arbuthnot Securities Limited are acting as joint financial advisors to Virage Logic. Jefferies International Limited and Woodside Capital Partners are acting as joint financial advisors to ARC.