Intel Corporation and Xircom have entered into a definitive agreement under which Intel, through a wholly owned subsidiary, would acquire Xircom for $25 per share in an all-cash tender offer valued at approximately $748 million.
In addition, Intel will assume all existing vested and unvested employee options. The acquisition complements Intel’s existing desktop PC and server-based network access businesses by enabling Intel to provide new products for notebook and mobile computing uses.
Xircom, based in Thousand Oaks, CA, is a supplier of PC cards and other products used to connect mobile computing devices to corporate networks and the Internet.
The agreement provides for a cash tender offer to acquire all of the outstanding shares of Xircom common stock at $25 per share, which will commence within 10 working days. The Board of Directors of Xircom has approved the definitive agreement and has unanimously recommended that Xircom stockholders tender their shares pursuant to the offer.
Intel’s obligations to accept shares tendered in the offer will be conditional upon the tender of a majority of outstanding Xircom shares on a fully-diluted basis, regulatory approvals and other customary conditions, and compliance by Xircom with certain financial and business criteria. The tender offer will expire 20 business days after it is commenced, but may be extended under certain circumstances.
The current chief executive officer of Xircom has agreed to tender his shares in the offer. It is expected that all shares not purchased in the tender offer will be converted into the right to receive $25 per share in a second-step merger following the tender offer.
The acquisition is expected to be completed in the first quarter of this year. Upon completion of the acquisition, Xircom will become a wholly owned subsidiary of Intel. The organization will be part of Intel’s Network Communications Group.