PMC-Sierra to Acquire Storage Semiconductor Business from KKR and Silver Lake Partners
October 30 2005 - 10:24PM
Business Wire
PMC-Sierra, Inc. (NASDAQ:PMCS), a leading provider of high-speed
broadband communications and storage semiconductors, today
announced that it has entered into a definitive agreement with
Kohlberg Kravis Roberts & Co. and Silver Lake Partners to
acquire the storage semiconductor business of Agilent Technologies
for approximately $425 million in cash. The storage semiconductor
business is part of Agilent's Semiconductor Products Group, which
KKR and Silver Lake Partners are in the process of acquiring. The
acquisition of this business significantly strengthens PMC-Sierra's
position in the storage semiconductor market and creates one of the
industry's most complete end-to-end enterprise storage silicon
solutions. The storage semiconductor business of Agilent's
Semiconductor Products Group (SPG) is a long-term technology leader
in Fibre Channel protocol controllers with its Tachyon product line
and is developing next-generation multi-protocol controllers
supporting Fibre Channel and SAS/SATA/iSCSI storage systems, as
well as other storage-related products. When closed, the
acquisition is expected to be immediately accretive for PMC-Sierra.
"PMC-Sierra offers one of the most popular lines of Fibre Channel
loop switches and SAS/SATA expanders and multiplexers. Our
products, architectures, and technology roadmaps are highly
complementary with the storage semiconductor business of Agilent
and we both have excellent enterprise storage customer
relationships," said Bob Bailey, Chairman and CEO, PMC-Sierra. "The
combination of the two businesses allows us to significantly expand
our presence in the enterprise storage markets. I am very excited
to be acquiring such a market leader and working with their
talented people. For the customers, this combination is intended to
improve time-to-market, tighten reference designs across a common
software architecture, and lower overall cost of ownership." Martin
Scott, VP and General Manager of the storage semiconductor business
at SPG, said: "The management team of the storage semiconductor
business supports this combination with PMC-Sierra as the most
compelling way for us to accelerate product development. This is a
big win for our customers. We look forward to becoming an important
part of PMC-Sierra's growth strategy." The business being acquired
by PMC-Sierra, which currently operates as the I/O Solutions
Division of Agilent's Semiconductor Products Group, employs
approximately 240 employees and has design centers located in Santa
Clara, Roseville (CA), and Singapore. PMC's acquisition is expected
to close in January of 2006, subsequent to the expected closing on
or near December 1, 2005 of a previously announced transaction in
which KKR and Silver Lake Partners will acquire SPG from Agilent.
Webcast Conference Call The Company will be holding a conference
call for the financial community at 5:30am Pacific Time/8:30 am
Eastern Time on Monday, October 31, 2005 to review the
aforementioned transaction. To listen to the call, investors will
be able to access an audio webcast of the conference call via our
website at www.pmc-sierra.com. To listen to the conference call
live by telephone, please dial 719-457-2630 approximately ten
minutes before the start time. A telephone replay will be available
15 minutes after the completion of the call and can be accessed by
dialing 719-457-0820 (replay access code is 1380456). Safe Harbor
Statement PMC's forward-looking statements, concerning the
strengthening of PMC's storage position, expansion in the storage
market, anticipated closing of the acquisition and whether the
transaction will be accretive, involve risks and uncertainties.
Actual results may differ from projections for varied reasons,
including changes in semiconductor market conditions and demand for
storage semiconductor products, the impact of competitive products
and pricing, technological and product development risks and other
risk factors relating to PMC's business detailed in the Company's
Securities and Exchange Commission filings; the risk that the
acquisition will not be consummated in a timely manner due to
governmental approvals or other closing conditions, including the
availability of audited financial statements; risks of integrating
the business acquired with PMC's operations; and the risk that
future results of the business acquired are less than its
historical results. PMC-Sierra does not undertake any obligation to
update the forward-looking statements. About PMC-Sierra
PMC-Sierra(TM) is a leading provider of broadband communications
and storage semiconductors for enterprise, access, metro, storage,
wireless infrastructure and customer premises equipment. The
company offers worldwide technical and sales support, including a
network of offices throughout North America, Europe and Asia. The
company is publicly traded on the NASDAQ Stock Market under the
PMCS symbol and is included in the S&P 500 Index. For more
information, visit www.pmc-sierra.com. About KKR KKR is one of the
world's oldest and most experienced private equity firms
specializing in management buyouts, with offices in New York, Menlo
Park, California and London, England. Over the past twenty-nine
years, KKR has invested in more than 130 transactions with a total
value of US$158 billion. About Silver Lake Partners Silver Lake
Partners is the leading private equity firm focused exclusively on
large-scale investing in technology and related growth industries.
Silver Lake seeks to achieve superior returns by investing with the
strategic insight of an experienced industry participant, the
operating skill of a world-class manager, and the financial
expertise of a disciplined private equity investor. (Note to
Editor: For public relations contact at KKR, please call Ruth
Pachman at 212-521-4891 and for public relations contact at Silver
Lake Partners, please call Matt Benson at 415-618-8750). (C)
Copyright PMC-Sierra, Inc. 2005. All rights reserved. PMC, PMCS,
PMC-Sierra, and "Thinking You can Build On" are trademarks of
PMC-Sierra, Inc. All other trademarks are the property of the
respective owner.
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