MaxLinear, Inc. (NYSE:MXL), a leading provider of integrated radio
frequency and mixed-signal integrated circuits for the connected
home and wired and wireless infrastructure markets, and Exar
Corporation (NYSE:EXAR), a designer and developer of high
performance analog mixed-signal ICs and sub-system solutions,
announced today that they have entered into a definitive agreement
under which MaxLinear has agreed to acquire Exar for $13.00 per
share in cash. This price for each share of Exar represents a
22% premium over the Company’s closing price of $10.62 on Tuesday,
March 28. The total value is approximately $700 million, or $472
million net of Exar’s cash acquired. MaxLinear intends to
fund the transaction with cash from the combined balance sheets and
a $425 million term loan. The transaction will be conducted
by means of a tender offer and is expected to close in the second
quarter of 2017, subject to customary closing conditions and U.S.
regulatory approvals.
The acquisition significantly furthers MaxLinear’s strategic
goals of increasing revenue scale, diversifying revenues by end
customers and addressable markets, and expanding its analog and
mixed-signal footprint on existing tier-1 customer platforms. Exar
adds a diverse portfolio of high performance analog and
mixed-signal products constituting power management and interface
technologies that are ubiquitous functions in wireless and wireline
communications infrastructure, broadband access, industrial,
enterprise networking, and automotive platforms. MaxLinear
intends to leverage combined technological expertise, cross-selling
opportunities and distribution channels to significantly expand its
serviceable addressable market (“SAM”).
“We are very excited about the combination of these two
complementary organizations as we expand our capabilities, reach,
and value proposition to our customers,” said Dr. Kishore
Seendripu, CEO of MaxLinear. “Exar’s expertise in power
management and interface technologies, along with an extensive
distribution platform, should enable us to accelerate our growth,
capitalize on cross-selling opportunities and better serve our
customers. Our successful M&A track record is a testament
to our careful and thoughtful approach to acquisition integration,
and we expect the same with Exar. The increased scale and related
financial benefits of the transaction should result in immediate
non-GAAP EPS accretion and increased free cash flow.”
Ryan Benton, CEO of Exar, commented, “I am excited about the
prospects for the combination of MaxLinear and Exar. Based on my
extensive interactions with Kishore and his team, I am confident
that Exar’s customers and employees will benefit significantly from
the enhanced R&D scale, technology breadth, and market
leadership of the combined organization. MaxLinear’s commitment to
and its proven track record of providing its customers with
innovative and differentiated high performance analog, mixed-signal
and RF technology will present exciting new opportunities for our
employees, customers and supply chain. My team and I look forward
to working with the MaxLinear team towards the successful
integration of our companies.”
Following consummation, the transaction is expected to be
immediately accretive to MaxLinear’s non-GAAP earnings per share
and free cash flow. As a result of the combination, MaxLinear
expects to realize annualized run-rate synergies of $15 million
within 12 months of closing.
Tender Offering and ClosingThe acquisition will
be conducted by means of a tender offer for all of the outstanding
shares of common stock of Exar, followed by a second-step merger.
The boards of directors of both companies have unanimously approved
the transaction and MaxLinear has received support agreements from
certain Exar stockholders, directors and management totaling
approximately 20% of Exar’s common shares outstanding. The offer,
which is expected to commence within the next 20 business days,
will be subject to customary conditions, including satisfying the
minimum tender requirement in the tender offer and U.S. regulatory
approvals. MaxLinear currently expects the transaction to
close in the second calendar quarter of 2017.
Stifel is acting as exclusive financial advisor to MaxLinear,
and Wilson Sonsini Goodrich & Rosati, P.C. is acting as counsel
for MaxLinear. JPMorgan Chase Bank, N.A. and Deutsche Bank
Securities are providing committed debt financing for the
transaction. Cowen and Company, LLC is acting as exclusive
financial advisor to Exar, and Pillsbury Winthrop Shaw Pittman LLP
is acting as counsel for Exar.
MaxLinear Reaffirms Calendar First Quarter 2017
Guidance MaxLinear’s calendar first quarter 2017 revenue
is expected to be in the range of $86 million to $90 million.
Exar Reaffirms Fiscal Fourth Quarter 2017
Guidance Exar’s fiscal fourth quarter 2017 revenue is
expected to be in the range of $27.2 million to $28.2 million.
Conference Call / Webcast DetailsMaxLinear and
Exar management will host a conference call at 8:30 a.m. Eastern /
5:30 a.m. Pacific to discuss today’s announcement. Supporting
materials for the conference call, including a presentation, will
be available on the Investor Relations section of MaxLinear’s and
Exar’s websites at http://investors.maxlinear.com/ and
http://ir.exar.com/, respectively.
Interested parties may access the conference call via any of the
following:
Teleconference (US
& Canada): |
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877-407-3109 |
Teleconference
(International): |
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201-493-6798 |
Replay (US &
Canada): |
|
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877-660-6853 |
Replay
(International): |
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201-612-7415 |
Replay Passcode: |
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13653123 |
A live webcast of the conference call will be accessible from
the investor relations section of the MaxLinear website at
http://investors.maxlinear.com/ and will be archived and available
after the call. A replay of the conference call will also be
available for two weeks.
About ExarExar designs, develops and markets
high performance integrated circuits and system solutions for the
industrial, infrastructure, automotive and audio/video
markets. Exar’s broad product portfolio includes power
management, sensing and signal conditioning, interface, LED
lighting, data management and video processing solutions.
Exar has design centers in Silicon Valley, California and Hsinchu,
Taiwan and has sales locations worldwide providing real-time
customer support. For more information please visit Exar.com.
About MaxLinearMaxLinear is a leading provider
of radio-frequency and mixed-signal semiconductor solutions for the
connected home and wired and wireless infrastructure markets.
MaxLinear is headquartered in Carlsbad, California. For more
information please visit MaxLinear.com.
Forward-Looking StatementsThis press release
contains forward-looking statements within the meaning of the “safe
harbor” provisions of the Private Securities Litigation Reform Act
of 1995, including statements with respect to the anticipated
timing of the proposed tender offer and merger; anticipated effects
of the proposed tender offer and merger; prospects for the combined
company, including (without limitation) expectations with respect
to its addressable markets, opportunities within those markets, and
the ability of the combined company to serve those markets; the
growth strategies of MaxLinear generally and expectations with
respect to the impact of the acquisition on MaxLinear’s growth
strategies; expectations with respect to the products and customers
of the combined company after the proposed tender offer and merger;
strategic and financial synergies anticipated to be realized from
the proposed tender offer and merger; and expectations for
operating results of MaxLinear and Exar for their quarters ending
March 31, 2017 and April 2, 2017, respectively. These statements
are based on management’s current expectations and beliefs and are
subject to a number of factors and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. Forward-looking statements may contain
words such as “will be,” “will,” “expected,” “anticipate,”
“continue,” or similar expressions and include the assumptions that
underlie such statements. The following factors, among others,
could cause actual results to differ materially from those
described in the forward-looking statements: failure of the Exar
stockholders to tender their shares in connection with the tender
offer; failure to receive regulatory approvals; the challenges and
costs of closing, integrating, restructuring, and achieving
anticipated synergies, particularly in light of differences in the
businesses and operations of the two companies; the ability to
retain key employees, customers and suppliers; and other factors
affecting the business, operating results, and financial condition
of either MaxLinear or Exar, including those set forth in the most
recent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,
and Current Reports on Form 8-K reports filed by MaxLinear and
Exar, as applicable, with the Securities and Exchange Commission
(the “SEC”). All forward-looking statements are based on the
estimates, projections, and assumptions of MaxLinear or Exar
management, as applicable, as of the date hereof, and MaxLinear and
Exar are under no obligation (and expressly disclaim any such
obligation) to update or revise any forward-looking statements
whether as a result of new information, future events, or
otherwise.
Additional Information and Where to Find ItIn
connection with the proposed merger, MaxLinear and its subsidiary
will commence a tender offer (the “Offer”) and file a Tender Offer
Statement on Schedule TO with the SEC, and Exar will file a
Solicitation/Recommendation Statement on Schedule 14D-9 with the
SEC. EXAR STOCKHOLDERS AND OTHER INVESTORS ARE URGED TO READ
THE OFFER MATERIALS (INCLUDING THE OFFER TO PURCHASE, RELATED
LETTER OF TRANSMITTAL, AND CERTAIN OTHER OFFER DOCUMENTS) AND THE
SOLICITATION/RECOMMENDATION STATEMENT, INCLUDING ALL AMENDMENTS TO
THOSE MATERIALS. SUCH DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION,
WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE TENDER OFFER. The Tender Offer Statement and
the Solicitation/Recommendation Statement will be available without
charge at the SEC’s website at www.sec.gov. Free copies of
these materials and certain other offering documents will be sent
to Exar’s stockholders by the information agent for the
Offer. These documents may also be obtained for free by
contacting MaxLinear Investor Relations at
http://investors.maxlinear.com/, at IR@MaxLinear.com or by
telephone at (760) 517-1112 or by contacting Exar Investor
Relations at www.investorrelations@exar.com or by telephone at
(510) 668-7201. The contents of the websites referenced above are
not deemed to be incorporated by reference into the Offer
documents.
Non-GAAP Financial MeasuresThis communication
may contain certain non-GAAP financial measures, which management
believes are useful to investors and others in evaluating business
combinations. Further detail and reconciliations between the
non-GAAP financial measures and the GAAP financial measures are
available on our website.
MXL is MaxLinear’s registered trademark. Other trademarks
appearing herein are the property of their respective owners.
MaxLinear Investor Relations Contact:
Gideon Massey
Investor Relations Specialist
Tel: 949-333-0056
gmassey@maxlinear.com
Exar Investor Relations:
Keith Tainsky, CFO
Tel: 510-668-7201
Exar Investor Relations:
Laura Guerrant-Oiye
Investor Relations
Tel: 510-668-7201
Email: laura.guerrant@exar.com
Exar Corp. (NYSE:EXAR)
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