Free Newsletter
Register for our Free Newsletters
Newsletter
Zones
Access Control
LeftNav
Alarms
LeftNav
Biometrics
LeftNav
Detection
LeftNav
Deutsche Zone (German Zone)
LeftNav
Education, Training and Professional Services
LeftNav
Government Programmes
LeftNav
Guarding, Equipment and Enforcement
LeftNav
Industrial Computing Security
LeftNav
IT Security
LeftNav
Physical Security
LeftNav
Surveillance
LeftNav
View All
Other Carouselweb publications
Carousel Web
Defense File
New Materials
Pro Health Zone
Pro Manufacturing Zone
Pro Security Zone
Web Lec
 
ProSecurityZone Sponsor
 
ProSecurityZone Sponsor
 
ProSecurityZone Sponsor
 
ProSecurityZone Sponsor
 
ProSecurityZone Sponsor
 
ProSecurityZone Sponsor
 
 
News

Conexant To Be Acquired By SMSC

Conexant Systems : 11 January, 2011  (Company News)
Connectivity supplier to be purchased by SMSC under new agreement valued at 284 million dollars
SMSC and Conexant Systems have signed a definitive agreement under which SMSC will purchase all of the outstanding shares of Conexant in a stock and cash transaction valued at approximately $284 million including the assumption of Conexant’s net debt. The transaction has been approved by the boards of directors of both companies.



Combined Company Highlights:



* Complementary connectivity product portfolios to target more expansive set of computing, consumer, industrial and automotive applications,

* Serves key customers with more complete product solutions,

* Creates a stronger analog/mixed-signal R&D team with over 900 engineers globally,

* Combined company has the scale and resources to enhance SMSC’s financial model with a combined trailing twelve month revenue of approximately $632 million,

* Anticipated annualized pre-tax cost synergies of $8 to $10 million by the end of SMSC’s fourth quarter of fiscal 2012,

* Acquisition expected to be accretive to non-GAAP gross margins, non-GAAP operating margins and non-GAAP earnings per share immediately upon closing.



The combination of Conexant’s imaging, audio, embedded modem and video products with SMSC’s broad connectivity solutions targeting the computing, consumer, industrial and automotive markets provides for a highly complementary merger of talent and technology. Headquartered in Newport Beach, California, Conexant has approximately 600 employees worldwide, including over 230 in Asia.



“We believe that combining the growth potential of Conexant and SMSC will allow us to make use of complementary technology and engineering resources to provide our customers with expanded solutions in connectivity and content,” said Christine King, President & Chief Executive Officer of SMSC. “We plan to focus our resources on the areas of highest return and believe that our respective sales and supply chain relationships will help create a platform to grow our businesses. We expect the acquisition will be accretive to non-GAAP EPS immediately upon close. In addition, we expect to capture significant operating efficiencies that will position us to increase earnings growth. SMSC’s larger scale should position us to increase our R&D productivity and drive profitability and shareholder value.”



“In our industry, size and scope provide a significant advantage with customers and suppliers," said Scott Mercer, Conexant's Chairman and Chief Executive Officer. "SMSC and Conexant share similar core competencies in analogue and mixed-signal design, possess complementary product portfolios, and count many customers in common. By joining forces, we get the opportunity to take advantage of economies of scale and drive profitable growth. I am convinced that combining our companies will best serve the interests of Conexant stockholders, customers, and employees moving forward."



Sailesh Chittipeddi, currently President & Chief Operating Officer at Conexant, will join SMSC upon close of the acquisition as Executive Vice President, reporting to Christine King. Mr. Chittipeddi’s responsibilities will include all product lines and global marketing and engineering functions for SMSC. Mr. Chittipeddi joined Conexant in 2006. In his role as President & Chief Operating Officer, he had worldwide responsibility for engineering, operations, quality and marketing.



Under the terms of the agreement, for each share of Conexant that they own, Conexant stockholders will receive approximately $2.25 consisting of $1.125 in cash and a fraction of a share of SMSC common stock equal to $1.125 divided by the volume weighted average price of SMSC common stock for the 20 trading days ending on the second trading day prior to closing, but in no event more than 0.04264 nor less than 0.03489 shares of SMSC common stock. The total cash consideration to be paid in the transaction is approximately $98 million and the total number of shares of SMSC common stock to be issued (including the assumption of outstanding Conexant restricted stock units) is approximately 2.9 to 3.6 million. The transaction is expected to close in the first half of calendar 2011 subject to the satisfaction of regulatory requirements, approval by Conexant shareholders and other customary closing conditions. SMSC expects to realize approximately $8 to $10 million in annualized pre-tax cost synergies by the end of SMSC’s fourth quarter of fiscal 2012 as a result of the consolidation of support functions and optimization of the supply chain across a larger base.
Bookmark and Share
 
Home I Editor's Blog I News by Zone I News by Date I News by Category I Special Reports I Directory I Events I Advertise I Submit Your News I About Us I Guides
 
   © 2012 ProSecurityZone.com
Netgains Logo