ALISO VIEJO, Calif. and
SUNNYVALE, Calif., Nov. 24, 2015 /PRNewswire/ -- Microsemi
Corporation (Nasdaq: MSCC), a leading provider of semiconductor
solutions differentiated by power, security, reliability and
performance, and PMC-Sierra, Inc. (PMC®) (Nasdaq: PMCS), a
semiconductor and software solutions leader in storage, optical and
mobile networks, today announced that they have entered into a
definitive agreement under which Microsemi will acquire PMC for
$9.22 in cash and 0.0771 of a share
of Microsemi common stock for each share of PMC common stock
through an exchange offer. The transaction is valued at
approximately $2.5 billion and
represents a 77.4 percent percent premium to the closing price of
PMC's stock as of Sept. 30, 2015.
"We are pleased PMC has accepted our compelling strategic offer,
which clearly benefits shareholders of both Microsemi and PMC. We
can now shift our focus to realizing the significant synergies
identified during our comprehensive analysis," said James J. Peterson, Microsemi's chairman and CEO.
"As we have previously stated, this acquisition will provide
Microsemi with a leading position in high performance and scalable
storage solutions, while also adding a complementary portfolio of
high-value communications products. As we integrate the team and
drive profitability, our combined company will benefit from
increased scale, industry-leading margins, diversified market
exposure, consolidated infrastructure and substantial cost
savings."
The transaction is expected to be immediately accretive to
Microsemi's non-GAAP EPS and free cash flow. Microsemi anticipates
achieving more than $100 million in
annual cost synergies with greater than $75
million of those expected to be realized in the first full
quarter of combined operations. Microsemi currently estimates
approximately $0.60 of non-GAAP EPS
accretion in the first full year after closing the transaction.
Microsemi intends to fund the transaction and repay its existing
credit facility with existing cash, $2.7
billion in new transaction debt and $0.6 billion in Microsemi common stock.
Shareholders of Microsemi and PMC will own approximately 85 percent
and 15 percent, respectively, of the combined entity post
completion of the transaction.
Under the terms of the definitive acquisition agreement, a
wholly-owned subsidiary of Microsemi will commence an exchange
offer to acquire all of the outstanding shares of PMC common stock
for $9.22 in cash and 0.0771 of a
share of Microsemi common stock for each share of PMC common stock
tendered. Upon satisfaction of the conditions to the exchange
offer, and after the shares tendered in the exchange offer are
accepted for payment, the agreement provides for the parties to
effect, as promptly as practicable, a merger, which would not
require a vote of PMC's stockholders, and which would result in
each share of PMC common stock not tendered in the exchange offer
being converted into the right to receive $9.22 in cash and 0.0771 of a share of Microsemi
common stock. The exchange offer is subject to customary
conditions, including the tender of at least a majority of the
outstanding shares of PMC's common stock and certain regulatory
approvals, including the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act, and is expected to close in the first quarter of
calendar 2016. No approval of the stockholders of Microsemi is
required in connection with the proposed transaction. Terms of the
agreement were approved by the boards of directors of both
Microsemi and PMC.
Stifel is acting as exclusive financial adviser to Microsemi,
along with O'Melveny & Myers LLP which is serving as legal
adviser. Morgan Stanley Senior Funding, Inc. is providing committed
financing for the transaction to Microsemi.
Qatalyst Partners LP and Needham & Company, LLC are acting
as financial advisors to PMC and Skadden, Arps, Slate, Meagher
& Flom LLP is acting as PMC's legal advisor.
About Microsemi
Microsemi Corporation (Nasdaq: MSCC) offers a comprehensive
portfolio of semiconductor and system solutions for communications,
defense & security, aerospace and industrial markets. Products
include high-performance and radiation-hardened analog mixed-signal
integrated circuits, FPGAs, SoCs and ASICs; power management
products; timing and synchronization devices and precise time
solutions, setting the world's standard for time; voice processing
devices; RF solutions; discrete components; security technologies
and scalable anti-tamper products; Ethernet solutions;
Power-over-Ethernet ICs and midspans; as well as custom design
capabilities and services. Microsemi is headquartered in
Aliso Viejo, Calif., and has
approximately 3,600 employees globally. For more information, visit
www.microsemi.com.
About PMC
PMC (NASDAQ: PMCS) is the semiconductor and software solutions
innovator transforming networks that connect, move and store big
data. Building on a track record of technology leadership, PMC is
driving innovation across storage, optical and mobile networks.
PMC's highly integrated solutions increase performance and enable
next-generation services to accelerate the network transformation.
For more information, visit www.pmcs.com. Follow PMC on Facebook,
Twitter, LinkedIn and RSS.
Microsemi and the Microsemi logo are registered trademarks or
service marks of Microsemi Corporation and/or its affiliates.
Third-party trademarks and service marks mentioned herein are the
property of their respective owners.
Cautionary Note Concerning Forward-Looking Statements
Certain statements made herein, including, for example,
information regarding the proposed transaction between Microsemi
and PMC, the expected timetable for completing the transaction, and
the potential benefits of the transaction, are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1965, Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements reflect the current
analysis of existing information and are subject to various risks
and uncertainties. As a result, caution must be exercised in
relying on forward-looking statements. Due to known and unknown
risks, our actual results may differ materially from our
expectations or projections.
The following factors, among others, could cause actual results
to differ materially from those described in these forward-looking
statements: the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement; the outcome of any legal proceedings that could be
instituted against PMC or its directors or Microsemi related to the
merger agreement; the possibility that various conditions to the
consummation of the Microsemi exchange offer and merger may not be
satisfied or waived, including the receipt of all regulatory
clearances related to the merger; the failure of Microsemi to
obtain the necessary financing pursuant to the arrangements set
forth in the debt commitment letters delivered pursuant to the
merger agreement or otherwise; uncertainty as to how many shares of
PMC common stock will be tendered into the Microsemi exchange
offer; the risk that the Microsemi exchange offer and merger will
not close within the anticipated time periods; risks related to the
ultimate outcome and results of integrating the operations of
Microsemi and PMC, the ultimate outcome of Microsemi's operating
strategy applied to PMC and the ultimate ability to realize
synergies; the effects of the business combination on Microsemi and
PMC, including on the combined company's future financial
condition, operating results, strategy and plans; risks that the
proposed transaction disrupts current plans and operations, and
potential difficulties in employee retention as a result of the
merger; risks related to Microsemi's ability to successfully
implement its acquisition strategy or integrate other acquired
companies; uncertainty as to the future profitability of businesses
acquired by Microsemi, and delays in the realization of, or the
failure to realize, any accretion from acquisition transactions by
Microsemi; risks related to Microsemi's reliance on government
contracts for a significant portion of its sales, including impacts
of any termination or renegotiation of such contracts,
uncertainties of governmental appropriations and national defense
policies and priorities and effects of any past or future
government shutdowns; the risk of downturns in the highly cyclical
semiconductor industry; the effects of local and national economic,
credit and capital market conditions on the economy in general, and
other risks and uncertainties described herein, as well as those
risks and uncertainties discussed from time to time in our other
reports and other public filings with the U.S. Securities and
Exchange Commission ("SEC"), including, but not limited to, those
detailed in PMC's Annual Report on Form 10-K for the year ended
December 27, 2014 and PMC's most
recent quarterly report filed with the SEC, and Microsemi's Annual
Report on Form 10-K for the year ended September 27, 2015 filed with the SEC. The
forward-looking statements contained herein are made only as of the
date hereof, and we undertake no obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise.
Additional Information and Where to Find It
This document relates to a pending business combination
transaction between Microsemi and PMC. The exchange offer
referenced in this document has not yet commenced. This document
does not constitute an offer to sell or exchange, or the
solicitation of an offer to buy or exchange, any securities, nor
shall there be any sale of securities in any jurisdiction in which
such offer, sale or exchange would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. Microsemi will file a registration statement on Form
S-4 related to the transaction with the SEC and may file amendments
thereto. Microsemi and a wholly-owned subsidiary of Microsemi will
file a tender offer statement on Schedule TO (including a
prospectus/offer to exchange, a related letter of transmittal and
other exchange offer documents) related to the transaction with the
SEC and may file amendments thereto. PMC will file a recommendation
statement on Schedule 14D-9 with the SEC and may file amendments
thereto. PMC and Microsemi may also file other documents with the
SEC regarding the transaction. This document is not a substitute
for any registration statement, Schedule TO, Schedule 14D-9 or any
other document which PMC or Microsemi may file with the SEC in
connection with the transaction. Investors and security holders
are urged to read the registration statement, the Schedule TO
(including the prospectus/offer to exchange, related letter of
transmittal and other exchange offer documents), the recommendation
statement on Schedule 14D-9 and the other relevant materials with
respect to the transaction carefully and in their entirety when
they become available before making any investment decision with
respect to the transaction, because they will contain important
information about the transaction.
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. In addition, PMC's stockholders will be able to obtain
free copies of such materials by contacting Joel Achramowicz at (408) 239-8630.
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SOURCE Microsemi Corporation; PMC-Sierra, Inc.