ON Semiconductor (Nasdaq:ONNN) and California Micro Devices
(Nasdaq:CAMD) today announced the signing of a definitive merger
agreement pursuant to which ON Semiconductor will acquire
California Micro Devices (CMD) through a cash tender offer of $4.70
per share. With net cash, cash equivalents and short-term
investments of approximately $45 million at the end of November
2009, the transaction value of CMD represents an enterprise value
of approximately $63 million and an equity value of approximately
$108 million, based on common stock outstanding and issued. The
proposed transaction and related merger agreement have been
approved by each company’s board of directors.
“The acquisition of California Micro Devices will significantly
strengthen our offering of application specific integrated passive
(ASIP) devices to protect products in the wireless, computing and
consumer electronics end-markets,” said Keith Jackson, ON
Semiconductor president and CEO. “In addition, CMD’s expertise in
protection solutions for the high brightness LED (HBLED) market, as
well as their strengths in LC-based EMI (electromagnetic
interference) filtering and low capacitance ESD (electrostatic
discharge) protection, complement our existing portfolio of
protection and lighting solutions. With technology and process
development expertise in ESD and EMI protection, CMD is highly
differentiated in the marketplace – as demonstrated by their
strong relationships with leading global customers across multiple
large and growing applications. Combined with ON Semiconductor's
global sales channel footprint and effective channels of
distribution, we expect to be able to support a broader and deeper
penetration of CMD’s overall product portfolio with market-leading
customers. This should enable us to accelerate revenue growth for
CMD’s products and increase market share. We also believe CMD’s
products and operations will benefit from ON Semiconductor’s
world-class manufacturing capabilities.”
“California Micro Devices becoming a part of ON Semiconductor
represents a compelling opportunity for our customers, employees
and shareholders,” said Robert Dickinson, president and CEO of CMD.
“To compete successfully in today’s global marketplace, size and
scale are very important so we are pleased to become part of a
leading global company in the semiconductor sector. Combining our
leading-edge protection technology with ON Semiconductor’s
world-class operational capabilities, supply chain and global
customer and channel footprint will enable CMD’s products to better
penetrate the mobile, consumer, laptop and lighting
end-markets.”
Transaction Details
Under the terms of the agreement, which has been approved by
both boards of directors, ON Semiconductor will commence a tender
offer no later than December 29, 2009, to purchase all of the
outstanding shares of CMD’s common stock for $4.70 in cash. The
closing of the tender offer is subject to customary conditions,
including the tender of a number of shares that constitutes at
least a majority of CMD’s outstanding shares of common stock on a
fully diluted basis as further described in the merger agreement.
The agreement also provides that the parties effect, subject to the
satisfaction or waiver of customary conditions, a merger following
the completion of the tender offer, which will result in all shares
of CMD common stock not tendered in the tender offer being
converted into the right to receive the same $4.70 per share in
cash paid in the tender offer. ON Semiconductor will finance the
acquisition using existing cash resources and the closing of the
transaction is not contingent on the receipt of financing. The
companies expect the transaction to close in the first quarter of
2010.
Upon closing, ON Semiconductor may record a one-time charge for
purchased in-process research and development expenses and other
deal related costs. The amount of that charge, if any, has not yet
been determined.
“This acquisition is directly aligned with both our strategic
and financial goals,” said Donald Colvin, ON Semiconductor
executive vice president and CFO. “The transaction value represents
approximately 1.6 times trailing twelve month sales plus cash. We
also believe ON Semiconductor’s operational strengths will
significantly benefit the revenue and margin potential of CMD.
Given the significant synergies we expect to realize from this
combination, we anticipate that the acquisition will be accretive
to earnings per share within the first year post the transaction
close. We intend to provide further details on the acquisition and
our fourth quarter 2009 results on our regularly scheduled
quarterly earnings conference call in February 2010.”
GCA Savvian Advisors, LLC acted as exclusive financial advisor
to ON Semiconductor and is acting as the dealer manager for the
Tender Offer. DLA Piper US LLP acted as legal counsel to ON
Semiconductor. Pillsbury Winthrop Shaw Pittman LLP acted as legal
counsel and Needham & Company LLC provided a fairness opinion
to California Micro Devices.
About ON Semiconductor
With its global logistics network and broad product portfolio,
ON Semiconductor (Nasdaq:ONNN) is a premier supplier of high
performance, energy efficient, silicon solutions that enable
designers to quickly and cost-effectively improve system efficiency
for electronics in the computing, communications, consumer,
automotive, industrial, medical and military/aerospace markets. The
company’s portfolio includes power management, signal, logic,
discrete and custom devices. The company operates a network of
manufacturing facilities, sales offices, and design centers in key
markets throughout North America, Europe, and the Asia Pacific
regions. For more information, visit http://www.onsemi.com.
About California Micro Devices
California Micro Devices is a leading supplier of protection
devices for the mobile handset, high brightness LED (HBLED),
digital consumer electronics and personal computer markets.
Detailed corporate and product information may be accessed at
http://www.cmd.com.
ON Semiconductor and the ON Semiconductor logo are registered
trademarks of Semiconductor Components Industries, LLC. All other
brand and product names appearing in this document are registered
trademarks or trademarks of their respective holders. Although the
company references its website in this news release, information on
the website is not to be incorporated herein.
This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include, but are not limited to,
statements related to the commencement, consummation, and benefits
of the proposed transaction between ON Semiconductor Corporation
(“ON”) and California Micro Devices Corporation (“California Micro
Devices”) and the future financial performance of ON. These
forward-looking statements are based on information available to ON
and California Micro Devices as of the date of this release and
current expectations, forecasts and assumptions and involve a
number of risks and uncertainties that could cause actual results
to differ materially from those anticipated by these
forward-looking statements. Such risks and uncertainties include a
variety of factors, some of which are beyond ON’s or California
Micro Devices’ control. In particular, such risks and uncertainties
include difficulties encountered in integrating merged businesses;
the risk that the tender offer does not commence or is unsuccessful
(either because enough shares are not tendered or because other
conditions are not timely satisfied) or that the follow-on merger
does not close or is delayed, including the risk that the requisite
stockholder and regulatory approvals may not be obtained; the
possibility that expected benefits and cost savings may not
materialize as expected, the variable demand and the aggressive
pricing environment for semiconductor products; dependence on each
company’s ability to successfully manufacture in increasing volumes
on a cost-effective basis and with acceptable quality for its
current products; the adverse impact of competitive product
announcements; revenues and operating performance; poor economic
conditions and markets, including the current credit markets; the
cyclical nature of the semiconductor industry; changes in demand
for our products; changes in inventories at customers and
distributors; technological and product development risks;
availability of raw materials; competitors' actions; pricing and
gross margin pressures; loss of key customers; order cancellations
or reduced bookings; changes in manufacturing yields; control of
costs and expenses; significant litigation; risks associated with
acquisitions and dispositions; risks associated with leverage and
restrictive covenants in debt agreements; risks associated with
international operations including foreign employment and labor
matters associated with unions and collective bargaining
agreements; the threat or occurrence of international armed
conflict and terrorist activities both in the United States and
internationally; risks and costs associated with increased and new
regulation of corporate governance and disclosure standards
(including pursuant to Section 404 of the Sarbanes-Oxley Act of
2002); and risks involving environmental or other governmental
regulation. Information concerning additional factors that could
cause results to differ materially from those projected in the
forward-looking statements is contained in ON Semiconductor’s
Annual Report on Form 10-K, as filed with the Securities and
Exchange Commission (the “SEC”) on February 27, 2009, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and other of ON
Semiconductor’s SEC filings, and California Micro Devices’
Quarterly Report on Form 10-Q as filed with the SEC on November 9,
2009, Current Reports on Form 8-K and other of California Micro
Devices’ SEC filings. These forward-looking statements should not
be relied upon as representing ON Semiconductor’s or California
Micro Devices views as of any subsequent date and neither
undertakes any obligation to update forward-looking statements to
reflect events or circumstances after the date they were made.
Securities Law Disclosure and
Additional Information
The tender offer for the outstanding shares of common stock of
California Micro Devices Corporation (“California Micro Devices” or
“CMD”) has not yet commenced. No statement in this document is an
offer to purchase or a solicitation of an offer to sell securities.
At the time the tender offer is commenced, ON Semiconductor
Corporation and an indirect wholly-owned subsidiary of ON
Semiconductor Corporation will file a tender offer statement on
Schedule TO with the Securities and Exchange Commission, and
California Micro Devices will file a solicitation/recommendation
statement on Schedule 14D-9 with respect to the tender offer. Any
offers to purchase or solicitations of offers to sell will be made
only pursuant to such tender offer statement. The tender offer
statement (including an offer to purchase, a related letter of
transmittal and other offer documents) and the related
solicitation/recommendation statement will contain important
information, including the various terms of, and conditions to, the
tender offer, that should be read carefully by CMD’s stockholders
before they make any decision with respect to the tender offer.
Such materials, when prepared and ready for release, will be made
available to California Micro Devices’ stockholders at no expense
to them. In addition, at such time such materials (and all other
offer documents filed with the SEC) will be available at no charge
on the SEC’s Web site: www.sec.gov and also may be obtained by
contacting investor relations at ir@calmicro.com, or by mail at
California Micro Devices Corporation Investor Relations, 490 N.
McCarthy Blvd., No. 100, Milpitas, CA 95051, or by telephone at 1-
408-934-3144.
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