RF Micro Devices plans merger
Chip maker RF Micro Devices Inc. and TriQuint Semiconductor Inc. are combining in an all-stock deal valued at about $1.56 billion.
The deal announced Monday represents an implied price of $9.73 for each TriQuint share. This is a 5 percent premium to the company's Friday closing price of $9.23.
The two companies said that the combination will create new growth opportunities in the mobile devices, network infrastructure and aerospace/defense markets. They added that the deal will also help create mobile devices with dramatically higher capabilities to handle data.
The shareholders of each company will own about 50 percent of the shares in the new company. RF Micro CEO Bob Bruggeworth will serve as CEO of the new company while TriQuint CEO Ralph Quinsey will serve as non-executive chairman.
The new company will have a new name which has not yet been chosen.
TriQuint makes products for communications, defense and aerospace companies. The Hillsboro, Ore.-based company currently has 160.6 million outstanding shares, according to FactSet. RF Micro is based in Greensboro, N.C.
In December activist investor Starboard Value LP, TriQuint's second-biggest shareholder, announced that it would nominate its own slate of directors to TriQuint's board. Starboard had been trying to persuade TriQuint to restructure or sell its mobile power amplifier business, which makes devices used in cellphones and tablets.
TriQuint shareholders will receive 1.675 shares of the new company and RF Micro shareholders will receive 1 share of the new company for each share they own of their respective companies.
Both companies' boards unanimously approved the deal. It still needs approval from both companies' shareholders
The deal is anticipated to result in at least $150 million in cost savings and add to adjusted earnings per share in the first full fiscal year after the deal closes.
RF Micro and TriQuint will perform a 1-for-4 reverse stock split after the transaction closes. This will result in about 145 million outstanding shares.
In addition to the top two jobs, TriQuint Chief Financial Officer Steve Buhaly will serve as CFO of the new company, while RF Micro CFO Dean Priddy will serve as executive vice president of administration.
The board of the new company will include five directors from each company's existing board. Eight of the 10 board members will be independent.
The transaction is expected to close in the second half of the year.