- Creates an End-to-End Connectivity,
Internet Infrastructure and Hyperscale Data Center Market
Leader
- Facilitates Client to Cloud
Communications and Universal Access via Wireless or Wireline
Networks
- Immediately Accretive to Non-GAAP
Earnings Upon Close
- $75 Million of Annual Cost Synergies
Targeted within 12 Months, Adding $0.75 of Earnings Power on an
Annual Non-GAAP Basis
- Skyworks Expects Q4 FY15 Results to be
Better Than Guidance
Skyworks Solutions, Inc. (NASDAQ: SWKS), an innovator of high
performance analog semiconductors connecting people, places and
things, and PMC-Sierra, Inc. (PMC) (NASDAQ: PMCS), a semiconductor
and software solutions leader in storage, optical and mobile
networks, today announced a definitive agreement under which
Skyworks will acquire PMC for $10.50 per share in an all-cash
transaction valued at approximately $2 billion. This acquisition
solidifies Skyworks’ position as a highly diversified analog, RF
and mixed signal semiconductor leader by significantly expanding
its product portfolio, customer base and end market applications.
Upon completion of the acquisition, Skyworks expects annual
revenues of more than $4 billion with gross margin in the 55
percent range and operating margin exceeding 40 percent.
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“With our acquisition of PMC, Skyworks will be uniquely
positioned to capitalize on the explosive demand for high
performance solutions that seamlessly connect, transport and store
Big Data,” said David J. Aldrich, chairman and chief executive
officer of Skyworks. “Specifically, we plan to leverage PMC’s
innovative storage systems, flash controllers, optical switches and
network infrastructure solutions to expand our engagements with
some of the world’s leading OEMs and ODMs as well as emerging
hyperscale data center customers. At a higher level, this
complementary yet highly synergistic acquisition is consistent with
our stated strategy of diversifying into adjacent vertical markets
while leveraging our system-level expertise and global scale. PMC
enables us to substantially expand our serviceable market within
some of the fastest growing segments in technology including cloud
storage and optical networking. Financially, we expect this
transaction to create further economic value for our shareholders
upon closing, with immediate margin expansion and accretion. After
we implement $75 million of synergies, we expect at least $0.75 of
incremental non-GAAP diluted earnings per share on an annual
basis.”
“The PMC team is excited to join forces with Skyworks to realize
our vision of transforming the broader communications landscape
through unparalleled product breadth and operational scale,” said
Greg Lang, president and chief executive officer of PMC. “Given
Skyworks’ deep global sales channels and leadership applications
support, underpinned by a world class supply chain, we could not
have found a better partner. Together, we plan to develop a wider
range of leading-edge solutions for our customers, target new
growth vectors and enable some of the most exciting networking and
storage platforms in the world, while delivering immediate value
for our shareholders.”
Under the terms of the agreement, PMC’s stockholders will
receive $10.50 in cash for each share of PMC common stock held at
closing. This price represents a 37 percent premium to the close of
PMC’s stock as of October 5, 2015.
Skyworks intends to fund the acquisition with cash on hand from
the combined companies and with new, fully-committed debt
financing. The closing of the transaction is not subject to
financing conditions.
The Boards of Directors of each company have approved the
transaction, which is expected to close in the first half of
calendar 2016, subject to PMC shareholder approval, receipt of
regulatory approvals and other customary closing conditions.
Excluding any non-recurring acquisition-related charges and
amortization of acquired intangibles, Skyworks expects the
acquisition to be immediately accretive to non-GAAP earnings
post-closing and will finalize estimates of the transaction’s
financial impact as well as the accounting for the transaction upon
deal close.
Skyworks Business Update
Based on preliminary results, Skyworks expects to deliver
approximately $880 million in revenue and $1.52 of non-GAAP diluted
earnings per share for the fourth quarter of fiscal 2015.
“Skyworks’ sustained outperformance is being driven by the growing
adoption of our integrated mobile systems and new opportunities
across the Internet of Things,” said Donald W. Palette, executive
vice president and chief financial officer.
Skyworks Conference Call
Skyworks will be hosting a conference call tomorrow, October 6,
at 9:00 a.m. Eastern time to discuss the acquisition. To listen to
the conference call via the Internet, please visit the investor
relations section of Skyworks' website. To listen to the conference
call via telephone, please call 877-260-8898 (domestic) or
612-332-1210 (international), confirmation code: 370618
Playback of the conference call will begin at 9:00 p.m. Eastern
time on October 6, and end at 9:00 p.m. Eastern time on October 13.
The replay will be available on Skyworks' website or by calling
800-475-6701 (domestic) or 320-365-3844 (international), access
code: 370618
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.
About Skyworks
Skyworks Solutions, Inc. is empowering the wireless networking
revolution. Our highly innovative analog semiconductors are
connecting people, places and things spanning a number of new and
previously unimagined applications within the automotive,
broadband, cellular infrastructure, connected home, industrial,
medical, military, smartphone, tablet and wearable markets.
Headquartered in Woburn, Massachusetts, Skyworks is a global
company with engineering, marketing, operations, sales, and service
facilities located throughout Asia, Europe and North America. For
more information, please visit Skyworks’ website at:
www.skyworksinc.com.
About PMC
PMC is the semiconductor and software solutions innovator
transforming networks that connect, move and store big data.
Building on a track record of technology leadership, the company is
driving innovation across storage, optical and mobile networks.
PMC’s highly integrated solutions increase performance and enable
next-generation services to accelerate the network transformation.
For more information, visit www.pmcs.com.
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.
Note to Editors: Skyworks and Skyworks Solutions are trademarks
or registered trademarks of Skyworks Solutions, Inc. or its
subsidiaries in the United States and in other countries. All other
brands and names listed are trademarks of their respective
companies.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151005006797/en/
Skyworks Media Relations:Pilar Barrigas,
949-231-3061orSkyworks Investor Relations:Stephen Ferranti,
781-376-3056orPMC Media Relations:Kim Mason,
604-415-6239orPMC Investor Relations:Joel Achramowicz,
408-239-8630
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