Microchip will acquire TelCom Semiconductor in a stock-for-stock transaction valued at approximately $300 million on a fully-diluted basis based on Thursday’s closing prices.
TelCom is a provider of linear and mixed-signal integrated circuits solutions that are used in a range of applications in the wireless communications, computing, consumer electronics, networking, industrial and other markets.
Under the terms of the definitive merger agreement, if the average closing price of Microchip’s common stock for the ten trading days preceding the closing of the transaction is between $28.30 and $32.61, Microchip will issue a number of shares of its common stock for each outstanding share of TelCom equal to $15.00 divided by such 10 day average price.
If Microchip’s ten-day average closing price prior to the merger is less than $28.30, then each TelCom stockholder will receive .53 shares of Microchip, and if the ten-day average price is greater than $32.61, then each TelCom stockholder will receive .46 shares of Microchip.
Microchip expects the transaction to be completed during the first calendar quarter of 2001 and to be immediately accretive.
TelCom will become a subsidiary of Microchip and TelCom’s team of over 250 employees will become part of Microchip’s existing analog product group. Microchip expects to keep all of TelCom’s employees, and no reductions in workforce are expected.
The acquisition is intended to qualify as a pooling of interests for accounting purposes and to be tax-free to stockholders of TelCom. Completion of the acquisition is contingent upon approval by TelCom stockholders, on the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and on other customary conditions.
More at www.microchip.com