Microchip Technology Inc., Chandler AZ, provider of microcontroller, mixed-signal, analog and Flash-IP solutions, has signed a definitive agreement to acquire ISSC Technologies Corp., provider of low power Bluetooth and advanced wireless solutions for the Internet Of Things (IoT) market.
ISSC is publicly traded on the GreTai Securities Market and is headquartered in Hsinchu, Taiwan with customer service or research activities in Shenzhen, China and Torrance, California. ISSC had net sales of US$69.2-million in 2013 and an operating margin of 18.9% based on their reported results under International Financial Reporting Standards.
The acquisition has been approved by the Boards of Directors of each company. The tender offer is expected to close in the third quarter of calendar 2014. The follow-on merger is expected to close in the fourth quarter of calendar 2014, subject to approval of the follow-on merger by ISSC stockholders,
regulatory approvals and other customary closing conditions. In connection with the transaction, Microchip has entered into an agreement with certain ISSC shareholders holding approximately 28 percent of the outstanding shares of ISSC pursuant to which such shareholders have committed to tender approximately 17 percent of the outstanding shares of ISSC, which represents all unrestricted ISSC shares owned by them.
“We are pleased to join Microchip Technology, a premier company in the semiconductor industry. Microchip has demonstrated consistent profitability, technology leadership and growth in its core businesses. We believe that this acquisition provides the best vehicle for us to realize significant value for ISSC shareholders, as well as the opportunities from scale of the much stronger sales and manufacturing platforms of Microchip,” says Max Wu, Chairman of ISSC.
“This transaction represents the first major overseas acquisition by Microchip and the purchase will be funded with a portion of Microchip’s foreign cash and will not require any additional borrowings from our line of credit. We believe the combination of a very strategic transaction that provides low power Bluetooth technology, ISSC’s strengths and capabilities and our use of foreign cash makes this a compelling transaction for the shareholders of both companies,” adds Steve Sanghi, Microchip’s president and CEO.