Microchip Technology and SMSC Announce the Acquisition of SMSC by Microchip Technology
Acquisition Will Expand Microchip’s Smart Connectivity Solutions for Embedded Markets
CHANDLER, Ariz. & HAUPPAUGE, N.Y.--(BUSINESS WIRE)-- Microchip Technology Incorporated (NASDAQ: MCHP), a leading provider of microcontroller, analog and Flash-IP solutions, and Standard Microsystems Corporation (NASDAQ: SMSC) today announced that Microchip has signed a definitive agreement to acquire Standard Microsystems Corporation (“SMSC”) for $37.00 per share in cash, which represents a total equity value of about $939 million, and a total enterprise value of about $766 million, after excluding SMSC’s cash and investments on its balance sheet of approximately $173 million. The acquisition has been approved by the Boards of Directors of each company and is expected to close in the third quarter of calendar 2012, subject to approval by SMSC stockholders, regulatory approvals and other customary closing conditions.
“We believe SMSC’s smart mixed-signal connectivity solutions aimed at embedded applications are an ideal complement to Microchip’s embedded control business,” said Steve Sanghi, Microchip’s President and CEO. “This acquisition will expand Microchip’s range of solutions as SMSC contributes exciting new products and capabilities in the automotive, industrial, computing, consumer and wireless audio markets, significantly extending our served available market.”
“We are excited by the strategic possibilities presented by this acquisition,” continued Mr. Sanghi. “SMSC in its most recent fiscal year ending February 29, 2012 reported net sales of $412 million, non-GAAP gross margin of 54.4% of sales, and non-GAAP operating profit of 12% of sales. We expect this acquisition will be accretive to Microchip’s non-GAAP earnings in the first full quarter after completion of the acquisition. We look forward to completing this transaction in the third calendar quarter of 2012.”
“This transaction represents a compelling opportunity for SMSC employees, customers and stockholders by combining the leading market position and world class operational excellence of Microchip Technology with the world class smart mixed-signal connectivity solutions from SMSC,” said Christine King, President and CEO of SMSC. “We are pleased to become part of Microchip Technology, a premier company in the semiconductor industry.”
Conference Call Information:
Microchip will host a
conference call today, May 2, 2012 at 9:30 a.m. (Eastern Time) to
discuss this release. This call will be simulcast over the Internet at www.microchip.com.
The webcast will be available for replay until May 10, 2012.
A telephonic replay of the conference call will be available at approximately 12:00 p.m. (Eastern Time) on May 2, 2012 and will remain available until 5:00 p.m. (Eastern Time) on May 10, 2012. Interested parties may listen to the replay by dialing 719-457-0820 and entering access code 2069664.
Microchip will also host a conference call today, May 2, 2012 at 8:30 a.m. (Eastern Time) to discuss its Fourth Quarter and Fiscal 2012 financial results. This call will be simulcast over the Internet at www.microchip.com. The webcast will be available for replay until May 10, 2012. A telephonic replay of the financial results conference call will be available at approximately 11:00 a.m. (Eastern Time) on May 1, 2012 and will remain available until 5:00 p.m. (Eastern Time) on May 10, 2012. Interested parties may listen to the replay by dialing 719-457-0820 and entering access code 8885745.
Forward-Looking Statements
The statements in this release
relating to expanding Microchip’s smart connectivity solutions,
expecting to close the acquisition in the third quarter of calendar
2012, SMSC’s solutions being an ideal complement to Microchip’s embedded
control business, expanding Microchip’s range of solutions, SMSC
contributing exciting new products and capabilities, significantly
extending Microchip’s served available market, Microchip being excited
about the strategic possibilities of the acquisition, Microchip’s
expectation that the transaction will be accretive in the first full
quarter after completion of the acquisition, and the transaction being a
compelling opportunity for SMSC employees, customers and stockholders,
are forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to a number of business,
economic, legal and other risks that are inherently uncertain and
difficult to predict, including, but not limited to: the actual timing
of the closing of the acquisition, the satisfaction of the conditions to
closing in the acquisition agreement (including obtaining regulatory
clearances in the U.S. and other jurisdictions), any termination of the
acquisition agreement, changes in demand or market acceptance of SMSC’s
products and the products of its customers, changes in demand or market
acceptance of Microchip’s products and the products of its customers;
competitive developments; the costs and outcome of any current or future
litigation involving Microchip, SMSC or the acquisition transaction; the
effect of the acquisition on Microchip’s and SMSC’s existing
relationships with customers and vendors and their operating results and
businesses; the progress and costs of development of Microchip and SMSC
products and the timing and market acceptance of those new products;
Microchip’s ability to successfully integrate SMSC’s operations and
employees and retain key employees; and general economic, industry or
political conditions in the United States or internationally. For a
detailed discussion of these and other risk factors, please refer to the
SEC filings of Microchip and SMSC including those on Forms 10-K and
10-Q. You can obtain copies of Forms 10-K and 10-Q and other relevant
documents for free at Microchip’s website (www.microchip.com),
at SMSC’s website (www.smsc.com)
(as applicable) or the SEC's website (www.sec.gov)
or from commercial document retrieval services.
Stockholders of Microchip and SMSC are cautioned not to place undue reliance on the forward-looking statements in this press release, which speak only as of the date such statements are made. Neither Microchip nor SMSC undertakes any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this May 2, 2012 press release, or to reflect the occurrence of unanticipated events.
Additional Information and Where to Find It
SMSC intends to
file a proxy statement in connection with the acquisition transaction.
Investors and securityholders are urged to read the proxy statement when
it becomes available because it will contain important information about
the transaction. Investors and security holders may obtain free copies
of these documents (when they are available) and other documents filed
with the SEC at the SEC's web site at www.sec.gov.
Microchip, SMSC and their directors and executive officers may be deemed
to be participants in the solicitation of proxies from the stockholders
of SMSC in connection with the acquisition transaction. Information
regarding the special interests of these directors and executive
officers in the transaction will be included in the proxy statement
described above. Additional information regarding the directors and
executive officers of Microchip is also included in Microchip's proxy
statement for its 2011 Annual Meeting of Stockholders, which was filed
with the SEC on July 11, 2011. Additional information regarding the
directors and executive officers of SMSC is also included in SMSC’s
proxy statement for its 2011 Annual Meeting of Stockholders, which was
filed with the SEC on June 14, 2011. These documents are available free
of charge at the SEC's web site at www.sec.gov
and as described above.
About SMSC
SMSC (NASDAQ: SMSC) is a leading developer of
Smart Mixed-Signal Connectivity™ solutions. SMSC employs a unique
systems level approach that incorporates a broad set of technologies and
intellectual property to deliver differentiating products to its
customers. The company is focused on delivering connectivity solutions
that enable the proliferation of data in automobiles, consumer devices,
PCs and other applications. SMSC’s feature-rich products drive a number
of industry standards and include USB, MOST® automotive
networking, Kleer® and JukeBlox® wireless audio,
embedded system control and analog solutions, including thermal
management and RightTouch® capacitive sensing. SMSC is
headquartered in New York and has offices and research facilities in
North America, Asia, Europe and India. Additional information is
available at www.smsc.com.
About Microchip Technology
Microchip Technology Inc.
(NASDAQ: MCHP) is a leading provider of microcontroller, analog and
Flash-IP solutions, providing low-risk product development, lower total
system cost and faster time to market for thousands of diverse customer
applications worldwide. Headquartered in Chandler, Arizona, Microchip
offers outstanding technical support along with dependable delivery and
quality. For more information, visit the Microchip website at http://www.microchip.com.
Note: The Microchip name and logo, and PIC are registered trademarks of Microchip Technology Inc. in the USA and other countries. SMSC, MOST, Kleer, RightTouch and JukeBlox are registered trademarks and Smart Mixed-Signal Connectivity is a trademark of Standard Microsystems Corporation. All other trademarks mentioned herein are the property of their respective companies.
MICROCHIP CONTACTS:
J. Eric Bjornholt, CFO
480-792-7804
or
Gordon
Parnell
Vice President of Business Development and Investor
Relations
480-792-7374
or
SMSC CONTACT:
Carolynne
Borders
Vice President, Corporate Communications and Investor
Relations
631-435-6626
Source: Microchip Technology Incorporated
Released May 2, 2012