Intersil signals expansion with $1.4 billion acquisition
Intersil Corporation and Elantec Semiconductor have announced the signing of a definitive agreement for Intersil to acquire Elantec. Intersil, a global leader in wireless networking and high performance analogue, expands into additional high growth analogue markets with this acquisition.
Under the terms of the agreement, Elantec shareholders will receive 1.24 shares of Intersil stock and $8.00 in cash for each Elantec share. Based on Intersil's closing price of $36.65 per share on March 8, 2002, the implied transaction exchange ratio is 1.458 shares of Intersil stock for each Elantec share.
According to a statement, the transaction combines two leaders in some of the fastest growing markets in the semiconductor industry. Elantec, a provider of high performance analogue ICs, is said to be the leader in the high growth optical storage (CD read/write & DVD recordable) and flat panel display markets.
Both companies are said to have operated profitably during the 2001 downturn, and ended the year with gross margins in excess of 50 percent and significant cash balances. Intersil and Elantec reportedly outperformed the overall semiconductor industry in 2001 while investing a combined 22% of sales in new product development for some of the fastest growing markets.
'The combined company will have one of the industry's strongest balance sheets, with greater than $550 million in cash after the transaction and no debt,' commented Dan Heneghan, Intersil's Chief Financial Officer. 'Regarding the current business environment, demand for Intersil products is accelerating with orders running above expectations in each of our product lines.
'We now expect first quarter revenues to increase sequentially by 6% to 8%, versus Intersil's previous guidance of 3% to 5%. Increased wireless demand is driving most of the upside. Earnings per share should also increase to $0.13, versus guidance of $0.12.'
The Boards of Directors of both companies have unanimously approved the definitive agreement. The transaction is subject to customary regulatory approvals and shareholder votes and is expected to close by the end of the second quarter of 2002.