UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14A-101)
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[(Amendment No. )]
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Registrant ¨ Filed by a
Party other than the Registrant x
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Preliminary Proxy Statement |
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Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under Rule 14a-12 |
PMC-SIERRA, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Creating a Connectivity to the Cloud Powerhouse
David J. Aldrich Chairman and CEO
October 2015
Connecting Everyone and Everything, All the Time
Our Strategy
Capitalize on Powerful Market Forces
in Mobile and IoT
Provide Increased Value—Systems Leadership
Diversification—Expanding our Opportunities
Operational Excellence—Superior Financial Returns
Above Market Growth with Diversified Analog Financial Returns
Leadership in Integration
Standards Boards
and Regulatory SOI Advanced MCM Die
Flip Chip
Bodies Stacking
CMOS Proprietary
Influencing Amplifiers Processes
Technical SiGe
~10M Units/Day
Requirements
GaAs Filters Shielding WLCSP
Customization
SkyOne™ 4G Module
TC-SAW
Switches
Macro Environment
Mobile Drivers
Broad Market and IoT Drivers
Financial Returns
Market Background
Consumers, Content Providers,
Carriers Driving Data Explosion
Connectivity Crucial to the User Experience
OEMs Responding with Higher Performance Devices
Limited Spectrum to Support Exploding Data Demand
Mobile Devices are the Gateway to an Ecosystem of Rich Media and E-Commerce
Insatiable Demand for Higher Data
4K Video
High Def
Std. Def Video
Streaming Music
Gaming
Source:
U.S. Cellular, 4G Americas
Mobile Data Consumption Exploding
Source: Cisco
VNI Mobile, 2015
Connectivity an Enabler of an Ecosystem of Content and Services
E-Commerce Advertising
Mobile Payments Conte
Addressing the Data Challenge
More Frequency
Bands
o Number of Global Frequency Bands Continues to Rise o Number of Bands per Device Increasing o
Unlicensed Bands Becoming Available
More Data Through Existing Spectrum
LTE-Advanced and Carrier Aggregation o Diversity and MIMO o Wi-Fi Offload
Higher Power-Added Efficiency
Increasing Power Levels While Maintaining Battery Life
Tremendous Technical Challenges—Creating New Opportunities for Skyworks
Overview
Macro Environment
Mobile Drivers
Broad Market and IoT Drivers
Financial Returns
Complexity Driving Content
World Smartphone
Today
SkyOne Ultra (x3)
Bands: ~15
Filters: ~30 GPS SW/LNA
CA Combos: ~5 LED Flash
MIMO: 1 Diversity Module
DC/DC Converter
$10-12 Addressable
~3 Years
SkyOne™ Ultra (x5)
Carrier
Aggregation
Bands: >30 Diversity Module (x3)
Filters: >75
CA Combos: >200 GPS SW/LNA
MIMO: 8 LED Flash
MIMO / Multi-Antenna
ET Converter
Multi-Stream
$>18 Addressable
Long Term Growth in Mobile SAM
Integrated Mobile
Market Systems
Addressable Discrete PA
Biggest Growth in
Integrated Systems and Mobile Analog Products
Overview
Macro Environment
Mobile Drivers
Broad Market and IoT Drivers
Financial Returns
Broad Market Drivers
I. Internet of Things
Driving Connectivity into New Device Categories
II. Bandwidth Needs Growing Dramatically
Networking, Media, Storage, Cloud
III. Increasing
Vertical Market Penetration
Automotive, Medical, Industrial
Connectivity Spreading Across Diversified Markets
(B)
Units
0
2014 2015E 2016E 2017E 2018E 2019E
Internet of Things Wearables Tablets PC
Source: Ericsson, Skyworks estimates
New Market Opportunities
Connected Home
Skyworks Traction
Smoke Detectors
Thermostats
Alarm Systems
Wireless Lighting
Streaming Media Platforms
Intelligent Security
Audio Systems
Source: BI Intelligence Estimates
New Market Opportunities
Automotive Applications
Skyworks Traction
Navigational Assist
Backlight Drivers for In-Dash
Display
Collision Avoidance Systems
Growing Bandwidth Requirements
Enhancing Content
Opportunities
2012 2014 2016
SAM: <$1 SAM: $4-$5 SAM: $7-$10
MoCA Switch
11n WLAN FEMs 11ac GPS Rx
Load Switch Voltage Reg Sat ZigBee FEM
Load Switches CATV Voltage Reg
DC-DC Converters Opt DC-DC
MoCA Switch 4G L MoCA
Switch
Content Rich Set-top Boxes and Media Gateways Becoming the Hub of the Connected Home
Broad Markets—Long Term Growth
IoT Network
Catalog
Infrastructure
$10 Billion
Opportunity
Over 2-3 Year
Networking Emerging
Gear Period
Overview
Macro Environment
Mobile Drivers
Broad Market and IoT Drivers
Financial Returns
Significant Earnings Power
Strong Top Line Growth
—Expanding Opportunities in Targeted High Growth Markets
Business Model Contribution
—GM Expansion and Leverage
Best In Class
Financial Returns
—Earnings per Share; Cash Flow; ROIC
Unique Model Producing High Growth With Diversified Analog Returns
A Track Record of Results
With Strong Operating
Leverage
Gross Margin 220bp Op Margin 700bp
Notes: EPS, Gross Margin and Operating Margin Presented on a Non-GAAP Basis
EPS CAGR, Gross Margin, and Operating Margin Expansion Provided on a Fiscal Year Basis over Time Period Shown
Significant Earnings Potential Ahead
Q4’15
Mid Term
Revenue ($M) $3.5B ~$ 4B
Gross Margin 50% >50%
EPS ~$6 $7
~15% Market
Systems Solutions
Enhance Margins
Strong EPS Upside
Complexity Driving Profitability
Notes:
EPS, Gross Margin and Operating Margin Presented on a Non-GAAP basis
Summary
Target Broad Based, High Growth Segments
Enabling Connectivity in all Forms
Providing Value Added Solutions
Analog Complexity
Drives Profitability
Consistently Delivering Superior Returns
Diversification and Scale
Creating a Connectivity to the Cloud Powerhouse
Why PMC
Expands Our Serviceable Market into Cloud
Storage and Optical Networking
Combines PMC’s Leadership in Mixed Signal Storage and Transport Devices with SWKS RF/Analog Scale and Customers
Creates Operational Efficiencies and Cost Synergies
Benefits All of Our Stakeholders
Key Customers
Complementary Yet Highly
Synergistic
The Combined Market Opportunity
$ Billions
Networking
Broad Markets / IoT
Mobile
$12B
CAGR 12%
$17B
An Enormous Market Opportunity with Substantial Headroom
2015 2018
$2 $4 $6 $8 $10 $12 $14 $16 $18
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Important Additional Information Will Be Filed with the SEC
PMC plans to file with the SEC and mail to its stockholders a proxy statement in connection with the transaction. Additionally, PMC will file other relevant materials with the SEC in
connection with the transaction. The proxy statement and other relevant materials will contain important information about Skyworks, PMC, the transaction and related matters. Investors and security holders are urged to read the proxy statement and
the other relevant materials carefully when they become available before making any voting or investment decision with respect to the proposed merger because they will contain important information about the merger and the parties to the merger.
Investors and security holders will be able to obtain free copies of the proxy statement and relevant other
documents filed with the SEC by Skyworks and PMC through the website maintained by the SEC at www.sec.gov.
In
addition, investors and security holders will be able to obtain free copies of the proxy statement and the other relevant documents filed with the SEC by PMC from PMC by contacting Joel Achramowicz at (408) 239-8630.
Skyworks and PMC, and their respective directors and executive officers, may be deemed to be participants in the
solicitation of proxies in respect of the transactions contemplated by the merger agreement. Information regarding
Skyworks’ directors and executive officers is contained in Skyworks’ Form 10-K for the year ended October 3, 2014 and its proxy statement dated April 8, 2015.
Information regarding PMC’s directors and executive officers is contained in PMC’s Form 10-K for the year ended December 27, 2014 and its proxy statement dated March 20, 2015, which are filed with the SEC. Additional information
regarding the participants in the solicitation of proxies in respect of the transactions contemplated by the merger agreement and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy
statement and other relevant materials to be filed with the SEC when they become available.
Safe Harbor Statement
Certain statements made
herein are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements include without limitation information regarding the proposed transaction between Skyworks and PMC, the expected timetable for completing the transaction, future financial and
operating results, benefits and synergies of the transaction, future opportunities for the combined company and any other statements about Skyworks or PMC managements’ future expectations, beliefs, goals, plans or prospects. Forward-looking
statements can often be identified by words such as “anticipates,” “expects,” “forecasts,” “intends,” “believes,” “plans,” “may,” “will,” or “continue,” and
similar expressions and variations or negatives of these words. All such statements are subject to certain risks, uncertainties and other important factors that could cause actual results to differ materially and adversely from those projected, and
may affect our future operating results, financial position and cash flows.
These risks, uncertainties and
other important factors include, but are not limited to: the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the outcome of any legal proceedings that could be instituted
against PMC or its directors or Skyworks related to the merger agreement; the inability to complete the merger due to the failure to obtain stockholder approval for the merger or the failure to satisfy other conditions to completion of the merger,
including the receipt of all regulatory approvals related to the merger; the failure of Skyworks to obtain the necessary financing arrangements set forth in the debt commitment letter delivered pursuant to the merger agreement; risks that the
proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the merger; the effects of local and national economic, credit and capital market conditions on the economy in general,
and other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in our other reports and other public filings with the SEC, including, but not limited to, those detailed in Skyworks’
Annual Report on Form 10-K for the year ended October 3, 2014 and its most recent quarterly report filed with the SEC and in PMC’s Annual Report on Form 10-K for the year ended December 27, 2014 and its most recent quarterly report
filed with the SEC. The forward-looking statements contained herein are made only as of the date hereof, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or
otherwise.
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