CHANDLER, Ariz. and
SAN JOSE, Calif., Jan. 19, 2016 /PRNewswire/ -- Microchip
Technology Incorporated (NASDAQ: MCHP), a leading provider of
microcontroller, mixed-signal, analog and Flash-IP solutions, and
Atmel Corporation (NASDAQ: ATML) today announced that Microchip has
signed a definitive agreement to acquire Atmel for $8.15 per share in a combination of cash and
Microchip common stock. The acquisition price represents a
total equity value of about $3.56
billion, and a total enterprise value of about $3.40 billion, after excluding Atmel's cash and
investments net of debt on its balance sheet of approximately
$155.0 million at December 31, 2015.
"We are delighted to welcome Atmel employees to Microchip and
look forward to closing the transaction and working together to
realize the benefits of a combined team pursuing a unified
strategy. As the semiconductor industry consolidates,
Microchip continues to execute a highly successful consolidation
strategy with a string of acquisitions that have helped to double
our revenue growth rate compared to our organic revenue growth rate
over the last few years. The Atmel acquisition is the latest
chapter of our growth strategy and will add further operational and
customer scale to Microchip," said Steve
Sanghi, President and CEO of Microchip.
"Microchip and Atmel have a strong tradition of innovation,
stretching across microcontroller, analog, touch, connectivity and
memory solutions. Joining forces and combining our product
portfolios will offer our customers a richer set of solution
options to enable innovative and competitive products for the
markets they serve," said Ganesh Moorthy, COO of Microchip.
"Our Board of Directors determined, after consultation with our
financial advisor and outside legal counsel, that the transaction
with Microchip is a superior proposal for Atmel's stockholders
under the terms of our merger agreement with Dialog Semiconductor
plc that we terminated today. Under the Microchip
transaction, Atmel stockholders will receive a much higher cash
consideration per share compared to the Dialog deal, as well as the
opportunity for further upside through the ownership of stock of
Microchip," said Steven Laub,
President and CEO of Atmel.
Concurrent with this announcement, Microchip announced that its
Board of Directors has authorized an increase in the existing share
repurchase program to 15.0 million shares of common stock from the
approximately 11.4 million shares remaining under the prior
authorization. Under this program, in the next several
months, Microchip intends to repurchase the approximate number of
shares it issues in the Atmel acquisition, which is expected to
result in the transaction having the accretive effects of a cash
transaction from a financial perspective.
Following the closing, the transaction is expected to be
immediately accretive to Microchip's non-GAAP earnings per share.
Based on currently available information, Microchip
anticipates achieving an estimated $170
million in synergies from cost savings and incremental
revenue growth in fiscal year 2019 that begins on April 1, 2018.
The transaction has been approved by the Board of Directors of
each company and is expected to close in the second quarter of
calendar year 2016, subject to approval by Atmel's stockholders,
regulatory approvals and other customary closing conditions.
No approval by Microchip's stockholders is required in
connection with the transaction. The transaction is not
subject to any financing conditions.
Transaction Details
In the transaction, stockholders of Atmel will receive
$7.00 per share in cash and
$1.15 per share in Microchip common
stock, valued at the average closing price for a share of Microchip
common stock for the ten most recent trading days ending on the
last trading day prior to the closing, with the maximum number of
Microchip shares to be issued in the transaction being 13.0
million. To the extent that the number of Microchip shares
issuable would exceed 13.0 million, the cash consideration per
Atmel share will be increased such that the value of the combined
cash and stock consideration will remain at $8.15 per share (as valued based upon the average
closing price described in the previous sentence). Microchip
expects to fund the cash portion of the purchase price through a
combination of cash on its balance sheet and borrowings under its
existing credit facility.
In connection with the termination of the merger agreement with
Dialog, Atmel has paid Dialog a termination fee of $137.3 million.
J.P. Morgan is acting as Microchip's exclusive financial
advisor. Wilson Sonsini Goodrich & Rosati, P.C. is acting
as Microchip's legal advisor. Qatalyst Partners is acting as
exclusive financial advisor to Atmel. Jones Day is serving as
Atmel's legal advisor.
Conference Call Information; Presentation Materials
Microchip will host a conference call today, January 19, 2016 at 5:00
p.m. (Eastern Time) to discuss this release. You may
view our presentation material to which we will refer during the
conference call on Microchip's website at www.microchip.com.
The webcast will be available for replay until
January 26, 2016.
A telephonic replay of the conference call will be available at
approximately 8:00 p.m. (Eastern
Time) on January 19, 2016 and
will remain available until 8:00 p.m.
(Eastern Time) on January 26,
2016. Interested parties may listen to the replay by dialing
719-457-0820 and entering access code 219583.
Forward Looking Statements
The statements in this release regarding that the
transaction creates a microcontroller, analog and IoT powerhouse,
looking forward to closing the transaction and working together to
realize the benefits of a combined team pursuing a unified
strategy, that Microchip continues to execute a highly successful
consolidation strategy, that the Atmel acquisition will add further
operational and customer scale to Microchip, that joining forces
and combining the product portfolios of Atmel and Microchip will
offer their customers a richer set of solution options to enable
innovative and competitive products for the markets they serve,
that Atmel stockholders will have further upside through the
ownership of Microchip stock, that Microchip intends to repurchase
the approximate number of shares it issues in the Atmel
acquisition, that the stock buyback is expected to result in the
transaction having the accretive effects of a cash transaction from
a financial perspective, that the transaction is expected to be
immediately accretive to Microchip's non-GAAP earnings per share,
that Microchip anticipates achieving an estimated $170 million in synergies from cost savings and
incremental revenue growth in fiscal year 2019, that the
acquisition is expected to close in the second quarter of calendar
2016, and that Microchip expects to fund the cash portion of the
purchase price through a combination of cash on its balance sheet
and borrowings under its existing credit facility 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 transaction; the
satisfaction of the conditions to closing in the merger agreement
(including obtaining Atmel stockholder approval and regulatory
clearances); any termination of the merger agreement; changes in
demand for or market acceptance of the products of Atmel or
Microchip and the products of their respective customers;
competitive developments; the costs and outcome of any current or
future litigation involving Microchip, Atmel or the transaction;
the effect of the transaction on Microchip's and Atmel's existing
customer, supplier, vendor and other relationships and their
operating results and businesses; the progress and costs of
development of Microchip and Atmel products and the timing and
market acceptance of those new products; Microchip's ability to
successfully integrate Atmel's operations and employees, retain key
employees and otherwise realize the expected synergies and benefits
of the transaction; fluctuations in Microchip's stock price and
trading volume which could impact the number of shares Microchip
acquires under its share repurchase program and the timing of such
repurchases; fluctuations in Microchip's stock price which would
impact the number of shares that Microchip issues in the
transaction; 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
Atmel including those on Forms 10-K, 10-Q and 8-K. You can
obtain copies of Forms 10-K, 10-Q and 8-K and other relevant
documents free of charge on Microchip's website
(www.microchip.com), Atmel's website (www.atmel.com) (as
applicable) or the SEC's website (www.sec.gov) or from commercial
document retrieval services.
Stockholders of Microchip and Atmel 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 Atmel undertakes any obligation to
publicly update any forward-looking statements to reflect events,
circumstances or new information after the date of this press
release, or to reflect the occurrence of unanticipated events.
Additional Information and Where to Find It
This document does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. The proposed
transaction will be submitted to the stockholders of Atmel for
their consideration. Microchip will file a Registration Statement
on Form S-4 that will include a proxy statement of Atmel that will
also constitute a prospectus of Microchip in connection with the
acquisition transaction. Investors and security holders are
urged to read this document when it becomes available because it
will contain important information about the transaction.
Investors and security holders may obtain free copies of this
document (when it is available) and other documents filed with the
SEC at the SEC's web site at www.sec.gov. Microchip, Atmel
and their directors and executive officers may be deemed to be
participants in the solicitation of proxies from the stockholders
of Atmel 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/prospectus described above. Additional information
regarding the directors and executive officers of Microchip is also
included in Microchip's proxy statement for its 2015 Annual Meeting
of Stockholders, which was filed with the SEC on July 10, 2015, and Microchip's amendment to its
Annual Report on Form 10-K for the fiscal year ended March 31, 2015, filed with the SEC on
June 8, 2015. Additional
information regarding the directors and executive officers of Atmel
is also included in Atmel's proxy statement for its 2015 Annual
Meeting of Stockholders, which was filed with the SEC on
April 3, 2015. These documents
are available free of charge at the SEC's web site at www.sec.gov
and as described above.
About Microchip Technology
Microchip Technology Inc. (NASDAQ: MCHP) is a leading provider
of microcontroller, mixed-signal, 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.
About Atmel
Atmel Corporation (NASDAQ: ATML) is a worldwide leader in the
design and manufacture of microcontrollers, capacitive touch
solutions, advanced logic, mixed-signal, nonvolatile memory and
radio frequency (RF) components. Leveraging one of the industry's
broadest intellectual property (IP) technology portfolios, Atmel is
able to provide the electronics industry with intelligent and
connected solutions focused on the industrial, automotive,
consumer, communications and computing markets. For more
information, visit the Atmel website at http://www.atmel.com.
MICROCHIP CONTACT:
J.
Eric Bjornholt – CFO (480) 792-7804
ATMEL CONTACT:
Steve
Skaggs – CFO (408) 441-0311
Logo -
http://photos.prnewswire.com/prnh/20141115/158835LOGO
Logo - http://photos.prnewswire.com/prnh/20160119/323751LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/microchip-technology-to-acquire-atmel-300206644.html
SOURCE Microchip Technology Incorporated