Monday, November 30, 2009

Broadcom to Acquire Dune Networks

IRVINE, Calif., Nov 30, 2009 -- Broadcom Corporation (Nasdaq: BRCM), a global leader in semiconductors for wired and wireless communications, today announced that it has signed a definitive agreement to acquire Dune Networks, a privately-held company that develops switch fabric solutions for data center networking equipment. Data centers are scaling to provide significantly more bandwidth to meet the requirements of cloud computing, where computing resources, products and services, such as Software as a Service (SaaS), can be delivered real-time over the Internet. Dune Networks has developed a scalable chipset that supports bandwidth speeds of up to 100Gbps per port and can connect more than ten thousand servers (ports) in a single deployment.

"Dune's massively scalable interconnectfabric, combined with our Ethernet products, augments our portfolio of solutions for data center networking equipment," said Martin Lund, Vice President and General Manager, Broadcom's Network Switching line of business. "This technology is particularly well suited to meet the emerging requirements for cloud computing networks at a large scale, and will enable us to address new market applications for Ethernet in the data center."

"Dune Networks' distributed connection fabric is a complement to Broadcom's existing product suite," said Eyal Dagan, Chief Executive Officer, Dune Networks. "Our joint customers will be able to bring to market low cost, high performance data center switching that will enable end users to build next-generation cloud computing networks."

In connection with the acquisition, Broadcom expects to pay approximately $178 million, net of cash assumed from Dune Networks, to acquire all of the outstanding shares of capital stock and other rights of Dune Networks. The purchase price will be paid in cash, except that a portion of such purchase price attributable to unvested employee stock options will be paid in Broadcom restricted stock units. A portion of the cash consideration payable to the stockholders will be placed into escrow pursuant to the terms of the acquisition agreement. Excluding any purchase accounting related adjustments and fair value measurements, Broadcom expects the acquisition of Dune Networks will be neutral to slightly accretive to earnings per share in 2010. The boards of directors of the two companies have approved the merger. The closing, which is expected to occur by the end of Broadcom's first quarter ending March 31, 2010, remains subject to customary closing conditions.

Monday, November 23, 2009

IDT Divests Micro Networks Business

SAN JOSE, Calif.--(BUSINESS WIRE)--IDT® (Integrated Device Technology, Inc.)(NASDAQ:IDTI), a leading provider of essential mixed signal semiconductor solutions that enrich the digital media experience, today announced it has signed an agreement to divest its Micro Networks business to Spectrum Control, Inc. for approximately $13 million. The transaction, which has already received approval by the IDT Board of Directors, is expected to close by the end of November.

“Our Micro Networks business has been a stable business for IDT for many years. However, we continue to sharpen our focus on analog-intensive, mixed-signal solutions for the communications, computing and consumer markets. This divestiture is a great outcome for Micro Networks employees and provides funds for use in faster growing businesses that are better aligned with our strategy,” said Dr. Ted Tewksbury, IDT president and CEO.

Signal Hill acted as advisors for IDT on the transaction.

Wednesday, November 18, 2009

Semtech Announces Definitive Agreement to Acquire Sierra Monolithics, Inc.

CAMARILLO, Calif. & IRVINE, Calif.--(BUSINESS WIRE)--SEMTECH CORPORATION (NASDAQ: SMTC), a leading supplier of analog and mixed-signal semiconductors for high-end consumer, computing, communications and industrial equipment, has entered into a definitive agreement to acquire Sierra Monolithics, Inc. for $180 million in cash. Headquartered in Irvine, California with design centers in Irvine and Redondo Beach, California, Sierra Monolithics provides high performance analog ICs and solutions for a wide array of communications systems and applications. The transaction is expected to be accretive to Semtech’s GAAP earnings per share within twelve months of the transaction closing and is expected to be immediately accretive to Semtech’s Non-GAAP gross margins and Non-GAAP earnings per share.

Sierra Monolithics, Inc. (SMI) was founded in 1986, and has approximately 110 employees including over 60 engineers. SMI has experienced significant growth over the past few years fueled by rapid growth in traffic over both wireline and wireless telecom networks. Market growth drivers for SMI include growing video traffic over the internet, competition between cable operators and telecom carriers, emergence of datacenters, cloud computing, and wireless data services. Over the last five years, SMI has grown revenue at a compound annual growth rate of over 40%.

SMI is the recognized leader in the 40Gbps and 100Gbps SERDES space. Its 40Gbps SERDES product portfolio includes multiple chip sets which address all the major 40Gbps modulation schemes currently being deployed worldwide. These leadership products have enabled SMI to become a key supplier to almost all of the major telecom OEMs and Optical module customers offering 40Gbps solutions. Following up on its success in the 40Gbps SERDES arena, SMI was also the first semiconductor company to provide both client side as well as line side 100Gbps SERDES chip sets for the emerging 100Gbps telecom and datacom markets. In addition, SMI leverages its expertise in high frequency wireless technologies and protocols to deliver wireless solutions for high performance military and wireless networking applications.

Sierra Monolithics expects to generate approximately $50 million of revenue for calendar year 2009 with gross margins towards the high end of Semtech’s stated gross margin model of 55% to 60%. Driven by its growing product portfolio and the rapid growth markets it addresses, Sierra Monolithics expects to continue the rapid growth vector it has been on over the last five years, including revenue growth of approximately 20% to 30% in calendar year 2010.

Sierra Monolithics’ focus on providing leading solutions to the core communications infrastructure and leading edge defense markets enhances Semtech’s value proposition to major customers in these markets. With the acquisition of Sierra Monolithics, Semtech adds an additional, high growth revenue stream to Semtech’s portfolio of growth engines.

Charles Harper and Javed Patel, Sierra Monolithics President and Chief Executive Officer, will both become members of the Semtech Leadership Team reporting to Mohan Maheswaran after the closing of the transaction.

Under terms of the agreement and plan of merger, Semtech will pay the stockholders of Sierra Monolithics $180 million in cash at the closing. In addition, at the closing Semtech will also assume the existing unvested options of Sierra Monolithics’ employees valued at approximately $8 million and at closing will grant to employees additional equity incentives up to $12 million in value. $18 million of the cash consideration will be placed into escrow for twelve months in order to meet any indemnifiable claims pursuant to the terms of the definitive agreement. The transaction will be funded with Semtech’s existing cash reserves. In association with repatriating cash domiciled overseas to fund the transaction, Semtech expects to incur a one-time tax liability of approximately $33 million in Q3 FY10. The closing of the transaction remains subject to closing conditions, including the expiration or termination of the Hart-Scott-Rodino Act waiting period and obtaining other required consents.

Morgan Stanley & Co. Incorporated provided exclusive financial advisory services to Semtech and Paul, Hastings, Janofsky & Walker LLP served as legal counsel for Semtech. Jefferies & Company, Inc. served as financial advisor to Sierra Monolithics and Morrison & Foerster LLP served as legal counsel for Sierra Monolithics.

Friday, November 13, 2009

Silicon Storage Technology to Be Acquired for $2.10 Per Share

SUNNYVALE, Calif., Nov. 13 /PRNewswire-FirstCall/ -- SST (Silicon Storage Technology, Inc.) (Nasdaq: SSTI - News), a memory and non-memory products provider for high-volume applications in the digital consumer, networking, wireless communications and Internet computing markets, today announced that it has entered into a definitive merger agreement to be acquired by Technology Resource Holdings, Inc., a Prophet Equity LP-controlled entity, as well as by members of SST's management team. Prophet Equity LP will acquire all of the outstanding common stock of the company for $2.10 per share, except for shares held by Bing Yeh, SST's Chairman and Chief Executive Officer, and Yaw Wen Hu, SST's Executive Vice President and Chief Operating Officer and member of the Board of Directors, who have agreed to exchange all of their shares of SST common stock for shares of capital stock of the resulting privately held company. This price per share represents approximately a 13 percent premium to the closing price per share of SST's stock on November 12, 2009.

SST's Board of Directors, acting upon the recommendation of a Strategic Committee composed of all of SST's independent directors, approved the agreement and resolved to recommend that the company's shareholders adopt and approve the agreement.

The agreement contains a go-shop provision under which the Strategic Committee, with the assistance of its independent advisors, has the right to solicit proposals or offers with respect to, or that would reasonably be expected to lead to, an acquisition proposal from a third party for a 45 day period beginning on November 13, 2009. SST does not intend to disclose any developments with respect to this solicitation process unless or until the Strategic Committee has made a decision with respect to any proposals or offers it may receive.

"After an extensive review of strategic alternatives with company management and our financial advisors, we determined this all-cash sale of the company with a go-shop provision is in the best interests of the company's shareholders," said Ronald Chwang, chairman of the Strategic Committee.

"We believe that this transaction provides the greatest likelihood of achieving the highest value for the company's shareholders, and that this is also in the best interest of our customers, partners and employees. We believe the added flexibility of being a private company will help us to focus on delivering innovative memory and non-memory solutions to our customers and supporting their needs with the highest levels of service that they have come to expect," said Bing Yeh, co-Founder and Chief Executive Officer of SST.

The transaction, which is expected to close in the second quarter of 2010, is subject to regulatory approvals and approval of the agreement by (i) the holders of a majority of the company's outstanding common stock represented and voting at a special meeting to be held to approve the transaction, excluding Bing Yeh and Yaw Wen Hu, and (ii) the holders of a majority of the company's outstanding common stock, and other customary closing conditions.

Houlihan Lokey is serving as the exclusive financial advisor to the Strategic Committee of the Board of Directors in connection with the transaction.

Shearman & Sterling LLP is serving as legal advisor to the Strategic Committee of the Board of Directors in connection with the transaction.

Cooley Godward Kronish LLP is serving as legal advisor to the company in connection with the transaction.

Jackson Walker LLP is serving as legal advisor to Prophet Equity LP in connection with the transaction.

Tuesday, November 10, 2009

GigOptix, Inc. Announces Acquisition of ChipX

PALO ALTO, Calif.--(BUSINESS WIRE)--GigOptix, Inc. (OTCBB: GGOX), a leading high speed analog semiconductor manufacturer specializing in electronic engines for the optically connected digital world, today announced that the company has signed a definitive agreement, and completed the acquisition of ChipX, Incorporated, a privately-held fabless supplier of analog and mixed signal custom Application Specific Integrated Circuits (ASICs) on November 9, 2009.

It is anticipated that on a consolidated pro-forma, non-GAAP basis, the company, with locations in the U.S., Switzerland and Israel, will have had combined revenues for the first nine months of 2009 of more than $25M. GigOptix and its subsidiaries will also have a work force of approximately 95 employees, down from 115 pre-merger, of which around 40% are in research and development, and approximately 15% are in sales and marketing. As demonstrated in its previous three acquisitions, the company believes it will achieve significant financial efficiencies after consolidation. Prior to the acquisition, GigOptix employees delivered approximately $230K annual revenue per employee, which the company plans to improve to over $300K annual revenue per employee in 2010.

With the acquisition, GigOptix brings high volume silicon design expertise into the company to complement its design excellence in the more specialist semiconductor technologies of III-V, Silicon germanium and of course its unique expertise in Electro-Optic (EO) polymer technology. This will support its strategic move into higher levels of integration of analog and mixed signal system-on-chip products, such as Clock Data Recovery (CDR) and Serializer/De-Serializers (SERDES). Similar to the acquisition of Helix Semiconductors in January 2008, the acquisition supports GigOptix’s plan to efficiently expand its product portfolio into high volume optically connected markets such as consumer electronics, data centers, high performance computing as well as significantly reducing the time and cost of developing new products, customer relationships and vertical markets. The transaction also delivers increased scale with an existing revenue stream from complementary product sales.

The terms of the deal provide for the ChipX investors to receive approximately 3.5 million common shares, representing approximately 26% of the fully diluted share count of GigOptix. As well as the operational benefits, the acquisition is anticipated to have the significant effect of broadening the ownership of the GigOptix common stock with the addition of new strategic and institutional investors. In parallel with closing the acquisition, the company has entered into a new commercial banking relationship with Bridge Bank, N.A. (NASDAQ: BBNK), a full-service professional business bank based in San Jose, California, which will include a $4 million asset-based line of credit.

Thursday, November 5, 2009

ON Semiconductor Acquires PulseCore Semiconductor

ON Semiconductor (Nasdaq: ONNN) today announced the acquisition of PulseCore Semiconductor in an all cash transaction for initial consideration of approximately $17 million. PulseCore is now a wholly owned subsidiary of ON Semiconductor.

“The acquisition of PulseCore expands ON Semiconductor’s high gross margin clock and circuit protection offerings for the consumer, wireless and computing end-market customers,” said Keith Jackson, ON Semiconductor president and CEO. “PulseCore’s capabilities in standard and custom high-speed and low power analog and mixed signal solutions for electromagnetic interference (EMI) reduction also enhance ON Semiconductor’s overall EMI filtering and circuit protection portfolios. In addition, PulseCore’s strong design capabilities and history in India represents ON Semiconductor’s first foray into design activity in that country.”

This acquisition provides current and prospective customers of PulseCore products access to ON Semiconductor’s world-class global manufacturing, sales, and support operations.

PulseCore’s multiple generations of EMI reduction technology — including its standard and custom high-speed and low-power analog and mixed-signal silicon solutions — address the growing problem of EMI compliance issues within high-volume consumer applications. PulseCore’s proprietary spread-spectrum technology has been proven in a range of applications from top-tier consumer electronics OEM’s.

The majority of customers’ daily business interactions with PulseCore Semiconductor, including sales operations, will remain unchanged at this time. In addition, substantially all PulseCore employees will join the ON Semiconductor team.

Monday, November 2, 2009

Intelleflex Adds Development Team and IP, Spun Out from Maxim Integrated Products

Santa Clara, CA, October 28, 2009 -- Intelleflex, the leader in Extended Capability RFID, today announced that they have reached a definitive agreement with Maxim Integrated Products (NASDAQ: MXIM) that will result in the transfer of a Maxim engineering team, a body of design works and related IP to Intelleflex in return for Maxim receiving an equity position in Intelleflex. In addition, Intelleflex and Maxim will partner on certain go-to-market activities in the future.

Intelleflex President and CEO Peter Mehring commented, "This transaction combines the leaders in Class 3 RFID. The added development capacity and complementary design ideas will allow us to accelerate the product road map and build a leading position in the applications and markets for Class 3 RFID technology."

Maxim Division Vice President Chris Neil commented, “The combination of these complementary teams creates a clear leader in this emerging Class 3 RFID technology. The Maxim team is leading the Class 3 world-wide standards definition and development, and the Intelleflex team is the leader in Extended Capability RFID product development. ”

"We saw this spin-out combination as a natural fit that further strengthens Intelleflex's position," added Ketan Patel of New Venture Partners, who recently led a $8M investment round in Intelleflex. "The Maxim team was doing great work on a parallel path with Intelleflex. By joining forces, they'll be able to move further, faster toward an impressive set of new extended capability RFID products for major market impact in 2010 and beyond." New Venture Partners LLC, is a global venture capital firm dedicated to corporate technology spinouts, with over $700 million under management..

In total, seven engineers from Maxim will be joining the team at Intelleflex, and will be based in Dallas, TX and at Intelleflex's headquarters in Santa Clara, CA.