- 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
Company Website:
http://www.skyworksinc.com
WOBURN, Mass. & SUNNYVALE, Calif. -- (Business Wire)
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/
Contacts:
Skyworks Media Relations:
Pilar Barrigas, 949-231-3061
or
Skyworks
Investor Relations:
Stephen Ferranti, 781-376-3056
or
PMC
Media Relations:
Kim Mason, 604-415-6239
or
PMC
Investor Relations:
Joel Achramowicz, 408-239-8630
Source: Skyworks Solutions, Inc.
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