Key Transaction Highlights:
- Acquisition promotes further growth in
sensor and actuator products, an important part of TDK’s strategic
growth plan, and will strengthen TDK’s position as a stronger
global player for sensor solutions.
- Transaction brings together more
complete portfolio of sensor and software solutions spanning
inertial, pressure, microphone and ultrasonic wave sensor products
and technologies from InvenSense, with TDK’s pressure, temperature,
electric current and various other sensors.
- USD 13.00 per share, representing a
19.9% premium to InvenSense’s closing share price on December 20,
2016 and a 52.4% premium to its 60-day volume-weighted average
trading price as of December 20, 2016.
- Transaction will be financed with
cash-on-hand.
TDK Corporation (President and CEO: Shigenao Ishiguro,
hereinafter referred to as “TDK”) and InvenSense, Inc. (President
and CEO: Behrooz Abdi, hereinafter referred to as “InvenSense”)
entered into a definitive agreement today wherein TDK agrees to
acquire all of the outstanding InvenSense shares for cash at an
acquisition price of USD 13.00 per InvenSense share, for a total
acquisition price of USD 1.3 billion. The transaction has been
unanimously approved by the Boards of Directors of both companies.
Completion of the transaction is expected in second quarter of the
fiscal year ending March 31, 2018, and is subject to approvals by
InvenSense shareholders and the relevant regulatory authorities.
The acquisition will be completed through a merger of a newly
created subsidiary of TDK with and into InvenSense, with InvenSense
continuing following the merger as a wholly-owned subsidiary of
TDK.
TDK’s current medium-term (3-year) management plan ending in
March 2018 focuses on the importance of three areas: a) automotive,
b) manufacturing devices and energy, and c) Information and
Communications Technology (ICT). As part of its strategy for growth
in these key areas, TDK has identified sensors and actuators,
energy units and next-generation electronic components as three
product areas for strategic growth aimed at unlocking new business
opportunities in the fields of Internet of Things (IoT). Sensors
are viewed as an important IoT-enabling technology and TDK
envisions greatly expanding this portion of its business and
providing a broad range of sensor solutions to its customers. TDK
currently sells magnetic sensors that employ thin-film magnetic
technology, which TDK has accumulated through its endeavors with
hard disk drive (HDD) solutions over many years. Further, TDK’s
product line includes pressure, temperature, electric current, and
various other sensor types, and TDK plans to expand its sensor
business going forward.
Through the acquisition of InvenSense, TDK will be able to
strengthen its product line-ups and technologies, which is expected
to enable the combined company to become a stronger player in broad
based sensor solutions for IoT, automotive and ICT by accelerating
the sensor product roadmap to offer innovative next generation
products and platforms. In addition, sensor fusion, the combination
of various sensor technologies and software creates products with
enhanced value solutions for customers across multiple fields.
InvenSense is a world forerunner in motion sensor solutions,
known mostly for its flagship six-axis and nine-axis motion
sensors, which are used in some of the world’s most advanced
consumer products and applications. In recent years its portfolio
has expanded with additional solutions for inertial, environmental,
microphone, and ultrasonic sensors. InvenSense’s “fabless”
manufacturing model enables development of high-performance and
cost effective products via its unique CMOS-MEMS production
process. Enhanced by its value-added software solutions, InvenSense
has expanded rapidly to become a worldwide strong player in sensors
for consumer devices including smartphones, drones, wearables,
gaming, inertial navigation, and both optical and electronic image
stabilization for cameras. Looking ahead, growth avenues beyond
mobile include large addressable opportunities in the fields of
IoT, automotive, and industrial, driven by increasing consumer
demand of indoor navigation, Virtual Reality (VR), Augmented
Reality (AR), and Advanced Driver Assistance Systems (ADAS).
The acquisition will enable TDK to combine InvenSense’s advanced
suite of sensor and software platforms with its wide-ranging
portfolio of magnetic, pressure, temperature, and microphone
sensors. In addition, sensor fusion, combining various types of
technologies and product line-up, creates products with high added
value. Sensor fusion combines multiple sensors and software
solutions that enables TDK to expand its business in the three key
areas and further strengthening of its position as a global player
in the sensor business, which is one of TDK’s strategic growth
products.
In January 2016, TDK established a joint venture with Qualcomm
Incorporated, called RF360 Holdings Singapore PTE, Ltd., and has
also entered into agreements to expand technical cooperation in a
wide range of fields including passive components, batteries,
wireless power transfer, sensors, MEMS and various other
next-generation technologies for mobile communications, IoT, and
automotive. This joint venture presents an exciting opportunity for
InvenSense to expand its customer base in ICT (Information and
Communications Technology), IoT and automotive areas while enabling
InvenSense to provide sensor solutions with increased
synergies.
As the fields of ICT, automotive and industrial experiences
growing demand for sensors, TDK, together with InvenSense, expect
to provide unique products and sensor expertise across sales
channels and a global customer base that TDK and InvenSense have
each cultivated over several years. TDK and InvenSense are resolved
to exhibit the same level of commitment to providing customers with
quality, expert solutions and customer service as a combined
company.
TDK’s President and CEO, Mr. Shigenao Ishiguro, made the
following statement regarding the acquisition:
“TDK’s sensor business, one of its strategic growth areas, can
be strengthened by merging TDK’s portfolio of magnetic sensor
technologies (where its strength lies) and its wide range of sensor
products with InvenSense’s expanding sensor technology. This
acquisition is a fundamental element in TDK’s strategy to provide
unique and high-value-added products and services in IoT. We aim to
become a strong player in the sensor business with InvenSense as
our perfect partner.”
InvenSense’s President and CEO Behrooz Abdi made the following
comment:
“This is an exciting day for InvenSense as our proposed
acquisition by TDK represents what we view as a compelling win for
InvenSense’s shareholders, customers and employees. TDK understands
the value of InvenSense’s suite of sensor and software platforms.
This merger is the culmination of years of innovation and execution
by our world-class employees. Together with TDK, we see a bright
future that leverages our commitment to innovation with TDK’s
scale, significant partner relationships and distribution channel.
Our strategic goals are aligned, and we are confident that together
with TDK we will accelerate our roadmap to provide next-generation
sensor technologies in key fields for the world’s most innovative
companies.”
In connection with the acquisition, BofA Merrill Lynch is acting
as TDK’s exclusive financial advisor and Jones Day is acting as
legal counsel to TDK. Qatalyst Partners is acting as exclusive
financial advisor and Pillsbury Winthrop Shaw Pittman LLP is acting
as legal counsel to InvenSense.
Additional Information and Where to Find It
In connection with the proposed transaction, TDK and InvenSense
intend to file relevant materials with the United States Securities
and Exchange Commission (the “SEC”). InvenSense will also file with
the SEC a proxy statement on Schedule 14A. Following the filing of
the definitive proxy statement with the SEC, InvenSense will mail
the definitive proxy statement and a proxy card to each stockholder
entitled to vote at the InvenSense special meeting relating to the
proposed transaction. INVESTORS AND SECURITY HOLDERS OF INVENSENSE
ARE URGED TO CAREFULLY READ THESE MATERIALS IN THEIR ENTIRETY
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER
RELEVANT DOCUMENTS THAT TDK OR INVENSENSE FILE WITH THE SEC WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT TDK, INVENSENSE AND THE PROPOSED TRANSACTION. The
proxy statement and other documents filed by InvenSense with the
SEC may be obtained free of charge at InvenSense’s website at
www.invensense.com or at the SEC’s website at www.sec.gov. These
documents may also be obtained free of charge from InvenSense by
requesting them by mail at InvenSense, Inc., 1745 Technology Drive
Suite 200, San Jose, California 95110, Attention: Investor
Relations, or by telephone at (408) 501-2200. The documents filed
by TDK with the SEC may be obtained free of charge at the SEC’s
website at www.sec.gov. These documents may also be obtained free
of charge from TDK by requesting them by mail at Shibaura Renasite
Tower, 3-9-1 Shibaura, Minato-ku, Tokyo 108-0023, Japan, Attention:
Investor Relations.
This communication does not constitute a solicitation of proxy,
an offer to purchase or a solicitation of an offer to sell any
securities. TDK, InvenSense, and certain of their directors,
officers and employees may be deemed to be participants in the
solicitation of proxies from the stockholders of InvenSense in
connection with the proposed transaction. Information about the
persons who may, under the rules of the SEC, be considered to be
participants in the solicitation of InvenSense’s stockholders in
connection with the proposed transaction, and any direct or
indirect interests, by security holdings or otherwise, they have in
the proposed transaction, will be set forth in InvenSense’s
definitive proxy statement when it is filed with the SEC.
Information regarding InvenSense’s directors and executive officers
and their ownership of InvenSense’s securities is set forth in the
definitive proxy statement for InvenSense’s 2016 Annual Meeting of
Stockholders, which was filed with the SEC on July 29, 2016, and
its Annual Report on Form 10-K for the fiscal year ended April 3,
2016, which was filed with the SEC on May 25, 2016. These documents
may be obtained free of charge at the SEC’s website at
www.sec.gov.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains forward-looking statements that
address a variety of subjects including, for example, the expected
timetable for closing of the transaction between TDK and
InvenSense, the expected benefits and synergies of the transaction,
TDK’s and InvenSense’s plans, objectives and expectations and TDK’s
expected product offerings, product development, marketing position
and technical advances resulting from the transaction. Statements
that are not historical facts, including statements about beliefs,
plans and expectations, are forward-looking statements. Such
statements are based on current expectations and are subject to a
number of factors and uncertainties, are not historical facts and
are subject to risks and uncertainties that could cause actual
results to differ materially from those described in the
forward-looking statements. These forward-looking statements
include statements that reflect the current expectations,
estimates, beliefs, assumptions, and projections of TDK’s senior
management about future events with respect to InvenSense’s
business and its industry in general. Statements that include words
such as “anticipates,” “expects,” “intends,” “plans,” “predicts,”
“believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,”
“potential,” “continue,” “goals,” “targets” and variations of these
words (or negatives of these words) or similar expressions of a
future or forward-looking nature identify forward-looking
statements. In addition, any statements that refer to projections
or other characterizations of future events or circumstances,
including any underlying assumptions, are forward-looking
statements. Actual results could differ materially from those
projected or forecast in the forward-looking statements. The
following important factors and uncertainties, among others, that
could cause actual results to differ materially from those
described in these forward looking statements include, without
limitation: the parties’ ability to satisfy the conditions
precedent to the consummation of the proposed transaction,
including, without limitation, the receipt of stockholder and
regulatory approvals, including the potential for regulatory
authorities to require divestitures in connection with the proposed
transaction; the occurrence of any event that could give rise to
the termination of the merger agreement; unanticipated difficulties
or expenditures relating to the proposed transaction; legal
proceedings that may be instituted against TDK or InvenSense and
others following announcement of the proposed transaction;
disruptions of current plans and operations caused by the
announcement or pendency of the proposed transaction; the risk that
expected benefits, synergies and growth prospects of the
transaction may not be achieved in a timely manner, or at all; the
risk that InvenSense’s business may not be successfully integrated
with TDK’s following the closing; potential difficulties in
employee retention as a result of the announcement and pendency of
the proposed transaction; and the response of customers,
distributors, suppliers and competitors to the announcement of the
proposed transaction. For additional information about factors that
could cause actual results to differ materially from those
described in the forward-looking statements, please refer to the
proxy statement when it becomes available and InvenSense’s filings
with the SEC, including the risk factors contained in InvenSense’s
most recent Annual Report on Form 10-K. Forward-looking statements
represent management’s current expectations and are inherently
uncertain. TDK and InvenSense assume no obligation to update the
information in this communication, except as required by law.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof.
About TDK Corporation
TDK Corporation is a leading electronics company based in Tokyo,
Japan. It was established in 1935 to commercialize ferrite, a key
material in electronic and magnetic products. TDK's portfolio
includes electronic components, modules and systems marketed under
the product brands TDK and EPCOS, power supplies, magnetic
application products as well as energy devices, flash memory
application devices, and others. TDK focuses on demanding markets
in the areas of information and communication technology and
consumer, automotive and industrial electronics. The company has a
network of design and manufacturing locations and sales offices in
Asia, Europe, and in North and South America. In fiscal 2016, TDK
posted total sales of approx. USD 11.5 billion and employed about
92,000 people worldwide.
About InvenSense
InvenSense, Inc. (NYSE: INVN) provides MEMS sensor platforms.
InvenSense’s vision of Sensing Everything™ targets the consumer
electronics and industrial areas with integrated Motion and Sound
solutions. InvenSense’s solutions combine MEMS (micro electrical
mechanical systems) sensors, such as accelerometers, gyroscopes,
compasses, and microphones with proprietary algorithms and firmware
that intelligently process, synthesize, and calibrate the output of
sensors, maximizing performance and accuracy. InvenSense’s motion
tracking, audio and location platforms, and services can be found
in Mobile, Wearables, Smart Home, Industrial, Automotive, and IoT
products. InvenSense is headquartered in San Jose, California and
has offices worldwide. For more information, go to
www.invensense.com and http://www.coursaretail.com.
©2017 InvenSense, Inc. All rights reserved. InvenSense logos are
trademarks of InvenSense, Inc. Other company and product names may
be trademarks of the respective companies with which they are
associated.
End
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Contact:David Almoslino, 408-501-2278Senior DirectorCorporate
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