Combining chips

Semiconductor players Integrated Device Technology (IDT) and Integrated Circuit Systems (ICS) are to merge in a billion dollar deal.

Under the terms of an agreement between the two companies, ICS stockholders will receive 1.300 shares of IDT common stock and $7.25 of cash for each share of ICS stock. Based on closing prices as of June 15, 2005, this values ICS at approximately $1.7 billion or $23.54 per share.

The combined company will retain the IDT name and its stock will continue to trade on the NASDAQ national market under the ticker symbol “IDTI”. The merged company will be based in San Jose, CA.

For the twelve months ending March 31, 2005, the combined company had revenues of approximately $645 million and generated $86 million in cash flow.

The deal is subject to customary closing conditions, including shareholder and regulatory approvals, and is expected to be completed in the autumn of 2005.