Intersil to Acquire Techwell

Intersil Corporation (NASDAQ: ISIL) and Techwell, Inc. (NASDAQ: TWLL) announced today they have entered into a definitive agreement for Intersil to acquire Techwell through a cash tender offer at $18.50 per share. Net of Techwell's cash and equivalents, the transaction values Techwell at approximately $370 million.

Techwell, with over 200 employees in the U.S., China, Japan, South Korea and Taiwan, is a fabless semiconductor company that designs and sells mixed signal video solutions for the security surveillance and automotive infotainment markets. Techwell's products enable the conversion of analog video signals to digital form and perform advanced digital video processing to facilitate the display, storage and transport of video content. Major applications using Techwell products include industrial DVRs, networked video recorders, multiplexers, as well as automotive front consoles, rearview mirrors and rear seat LCD displays.

"Techwell's team and products will expand our leadership in two high-growth industrial markets," said Dave Bell, Intersil's President and Chief Executive Officer. "The addition of Techwell's mixed signal video products will help our customers build solutions that improve performance, reduce overall cost and shorten time-to-market. In addition, the acquisition will significantly increase our overall industrial business, which will become our largest end market at approximately 31% of revenue," continued Mr. Bell.

"We are very excited to join the Intersil family," said Hiro Kozato, Techwell's President and Chief Executive Officer. "This combination will help us deliver a much broader product offering in Techwell's end markets. Intersil's customer relationships will create numerous new opportunities for the combined company," said Mr. Kozato.

The acquisition is expected to be accretive to Intersil's 2010 earnings, excluding one-time costs and other acquisition-related charges.

Tender Offer and Closing
Under the terms of the agreement, Intersil will commence a cash tender offer to acquire Techwell's outstanding shares of common stock at $18.50 per share. Terms of the agreement were unanimously approved by Techwell's board of directors, and Techwell's board has recommended that Techwell shareholders tender their shares into the offer. Techwell's directors, entities affiliated with Technology Crossover Ventures, and certain executive officers of Techwell (in total representing approximately 23% of the outstanding shares) have already agreed to tender their shares into the offer.

Intersil expects to finance the acquisition by issuing debt; however, the transaction is not subject to a financing condition. Intersil has received a financing commitment of $390 million from Morgan Stanley Senior Funding, Inc. in connection with the acquisition. Morgan Stanley is acting as financial advisor to Intersil in connection with the acquisition, and Dechert LLP is acting as Intersil's legal counsel. Deutsche Bank Securities Inc. is acting as financial advisor to Techwell in connection with the acquisition, and Pillsbury, Winthrop, Shaw and Pittman is acting as Techwell's legal counsel.

The acquisition is expected to close during Intersil's second quarter and is subject to customary regulatory approvals and the satisfaction of other transaction conditions including the tender of at least 50% of Techwell's outstanding shares.

Techwell adopts "poison pill" shareholder rights plan

SAN JOSE, Calif., August 5, 2009 (GLOBE NEWSWIRE) — Techwell, Inc. (Nasdaq: TWLL), a leading designer of mixed signal video semiconductor solutions for the security surveillance and automotive infotainment markets, today announced that its Board of Directors has adopted a Stockholder Rights Plan. Under the Rights Plan, Rights will be distributed as a dividend at the rate of one Right for each share of Techwell common stock held by stockholders of record as of the close of business on August 18, 2009.

The Rights Plan is designed to enable all Techwell stockholders to realize the full value of their investment and to provide for fair and equal treatment for all stockholders in the event that an unsolicited attempt is made to acquire Techwell. The adoption of the Rights Plan is intended as a means to guard against abusive takeover tactics.

The Rights will be distributed as a non-taxable dividend and will expire ten years from the date of adoption of the Rights Plan (or earlier if the stockholders of Techwell do not ratify the Rights Plan at the 2010 stockholders’ meeting or at or before each third annual stockholders’ meeting thereafter). The Rights will be exercisable only if a person or group acquires 20 percent or more of Techwell’s common stock, subject to certain exceptions set forth in the Rights Plan. If a person or group acquires 20 percent or more of Techwell’s common stock while the Rights Plan remains in place, all Rights holders, except such person or group, will be entitled to acquire Techwell’s common stock at a discount. The effect will be to discourage acquisitions of 20 percent or more of Techwell’s common stock in the absence of negotiations with Techwell’s Board of Directors.

The Rights will trade with Techwell’s common stock unless and until they are separated upon the occurrence of certain future events. Techwell’s Board of Directors may terminate the Rights Plan at any time or redeem the Rights prior to the time a person or group acquires 20 percent or more of Techwell’s common stock. Additional details regarding the Rights Plan will be outlined in a summary to be mailed to all stockholders following the record date, and a copy of the Rights Plan will be filed shortly with the Securities and Exchange Commission.

Techwell 10K

Revenue and trend by product line: "Revenues were $67.6 million in 2008 and $59.9 million in 2007, an increase of 13% in 2008 over 2007. Revenues from our security surveillance products were $52.7 million an increase of approximately $12.1 million, or 30%, in 2008 compared to 2007, primarily as a result of the increase in sales of our integrated four-in-one security surveillance products. Revenues from our LCD display products were $7.1 million, an increase of approximately $1.0 million, or 17%, in 2008 compared to 2007, primarily as a result of an increase in demand in the automotive market for vehicles with an in-car LCD display that utilize our products. Revenues from our video decoder products were $7.6 million, a decrease of approximately $4.7 million, or 38%, in 2008 compared to 2007, primarily as a result of a decrease in demand for our video decoders. Additionally, sales of our video decoders have also been impacted by the shift to application-specific products specifically designed for the security surveillance and automotive infotainment markets. Other revenues decreased to $0.3 million in 2008 as compared to $1.0 million in 2007, primarily as a result of decreased sales of our PCI video decoder products."

Wafer foundry: "We currently outsource our semiconductor manufacturing primarily to Taiwan Semiconductor Manufacturing Company, or TSMC."

Assembly and test: "We outsource all packaging and testing of our products to assembly and test subcontractors, primarily to Advanced Semiconductor Engineering, Inc., or ASE, in Taiwan."

Employees: "As of December 31, 2008, we employed 165 full-time employees, including 78 in research and development, 52 in sales, marketing and support, 17 in operations and 18 in general and administration. "

Patent foundation: "As of December 31, 2008, we had two issued patents in the United States and five patent applications pending in the United States and two applications pending in foreign jurisdictions."