Microchip to Acquire Microsemi for $8.35 Billion

Microchip Technology Inc. (NASDAQ: MCHP) announced on Thursday that it will acquire semiconductor solutions company, Microsemi Corp. (NASDAQ: MSCC) for a total of $8.35 billion. Microsemi shares were trading 5 percent higher during Friday’s pre-market hours.

Microchip will buy Microsemi for $68.78 per share, totaling the enterprise value of approximately $10.15 billion, which accounts for Microsemi’s cash and investments, net debt and balance sheet.

Microsemi manufactures semiconductors and system solutions for aerospace and defense, communications, data center and industrial markets. The deal will bolster Microchip’s computer segment, which accounts for approximately 15 percent of its full year revenue.

“This transaction represents a compelling opportunity for Microsemi stockholders, employees and customers by combining the leading embedded control market position of Microchip Technology with the world class power, security, reliability and performance solutions from Microsemi,” said James J. Peterson, Chairman and CEO of Microsemi.

“Microchip and Microsemi have a strong tradition of delivering innovative solutions to demanding customers and markets, thus creating highly valued and long-lasting revenue streams. Joining forces and combining our complementary product portfolios and end market exposure will offer our customers a richer set of solution options to enable innovative and competitive products for the markets they serve,” said Ganesh Moorthy, President and COO of Microchip.

Microchip says the transaction is expected to close in the second quarter of 2018 and expects the deals to be immediately accretive to its adjusted earnings per share.

J.P. Morgan is Microchip’s financial advisor and is providing $5.6 billion in committed financing. Qatalyst Partners is acting as exclusive financial advisor to Microsemi.

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