Silicon Storage Technology 8K - Going private or still in play?

Link to the original story.

Pursuant to that certain Agreement and Plan of Merger, between and among Silicon Storage Technology, Inc., or SST, Technology Resources Holdings, Inc. and Technology Resources Merger Sub, Inc., dated November 13, 2009, or the Merger Agreement, SST was permitted until 11:59 p.m. California time on December 28, 2009 to engage in a “go-shop” process. As part of the “go-shop” process, the Strategic Committee of SST’s Board of Directors, with the assistance of independent financial and legal advisors, contacted over 140 prospective buyers, several of whom have been designated by the Strategic Committee as an “Excluded Party” as defined in the Merger Agreement. By designating each party as an Excluded Party, SST is permitted to continue discussions with each of these parties with respect to a non-binding indication of interest submitted by such Excluded Party. Technology Resources Holdings, Inc. has notified the Strategic Committee that it disagrees with the designation of such parties as Excluded Parties under the Merger Agreement.

SST has not received any binding offers and has not reached a definitive agreement with any Excluded Party. Investors and shareholders are cautioned that SST may not receive a definitive binding offer, negotiate a definitive agreement or consummate a transaction with any Excluded Party as a result of these discussions. SST does not anticipate making further public disclosure with respect to any Excluded Party unless and until a definitive agreement has been reached or such disclosure is otherwise required by law.

The Merger Agreement is filed as Exhibit 2.1 to our Current Report on Form 8-K, dated November 13, 2009, as filed with the Securities and Exchange Commission, or SEC, on 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.

Silicon Storage Technology 10K

Wafer foundry and die sort: "During 2008, our major wafer fabrication foundries were TSMC, Grace, HHNEC and Seiko-Epson. In 2008, wafer sort, which is the process of testing individual die on silicon wafer, was performed at King Yuan Electronics Company, Limited, or KYE, Lingsen, HHNEC, Sanyo, Seiko-Epson and TSMC...........In 2001 and 2004, we invested an aggregate of $83.2 million in GSMC, a Cayman Islands company. Bing Yeh, our President, CEO and Chairman of our Board of Directors, is also a member of GSMC’s board of directors. GSMC has a wholly owned subsidiary, Shanghai Grace Semiconductor Manufacturing Corporation, or Grace, which is a wafer foundry company with operations in Shanghai, China. Grace began to manufacture our products in late 2003."

Assembly and test: "The subcontractors with the largest amount of our activity were KYE, Lingsen, and Powertech Technology, Incorporated, or PTI. We hold equity investments in three subcontractors: Apacer Technology, Inc., or Apacer, KYE and PTI."

Employees: "As of December 31, 2008, we employed 614 individuals on a full-time basis, 282 of whom reside in the United States. Of these 614 employees, 92 were employed in manufacturing support, 286 in engineering, 112 in sales and marketing and 124 in administration, finance and information technology."

Patent foundation: "As of December 31, 2008, we held 261 patents in the United States relating to certain aspects of our products and processes......."

Recent legal action: "On or about July 13, 2007, a patent infringement suit was brought by OPTi Inc. in the United States District Court for the Eastern District of Texas alleging infringement of two United State patents related to a “Compact ISA-bus Interface”. The plaintiff sought a permanent injunction, and damages for alleged past infringement, as well as any other relief the court may grant that is just and proper. On January 1, 2009, OPTi and SST resolved our differences and the suit was dismissed with prejudice."

Silicon Storage Technology NT 10K (Late Filing Notice)

"Silicon Storage Technology, Inc. (“SST”) is in the process of completing an impairment analysis of its investment in Grace Semiconductor Manufacturing Corporation, a privately held Cayman Islands Company (“GSMC”). On February 4, 2009 SST reported a $5.6 million impairment charge related to it investment in GSMC. Subsequent to the release of its 2008 financial results on February 4, 2009, additional information was obtained by SST which will impact the impairment analysis and increase the amount of the impairment charge. As a result of the ongoing impairment analysis, SST is currently unable to file its Annual Report on Form 10-K for the year ended December 31, 2008 by the required filing date of March 16, 2009 and currently anticipates that it will be filed on or before the fifteenth calendar day following the required due date in accordance with Rule 12b-25."