Acquicor and Jazz Semiconductor Announce Merger

September 26, 2006 by Jeff Shepard

Acquicor Technology Inc. and privately held Jazz Semiconductor, Inc. jointly announced that they have entered into a merger agreement under which Jazz Semiconductor will merge with a wholly owned subsidiary of Acquicor in an all-cash transaction valued at $260 million, subject to adjustment based on Jazz Semiconductor's working capital and for possible future contingent payments. The merger agreement has been approved by the board of directors of Acquicor and Jazz Semiconductor and by Jazz Semiconductor's stockholders. Completion of the merger is expected to occur in the first quarter of 2007.

Based in Newport Beach, California, Jazz Semiconductor is an independent wafer foundry primarily focused on specialty CMOS process technologies, including High Voltage CMOS, SiGe BiCMOS and RFCMOS for the manufacture of highly integrated analog and mixed-signal semiconductor devices. The company's specialty process technologies are designed for customers who seek to produce analog and mixed-signal semiconductor devices that are smaller and more highly integrated, power-efficient, feature-rich and cost-effective than those produced using standard process technologies.

Jazz Semiconductor was initially formed in March 2002 as a joint venture between The Carlyle Group, a global private equity firm, and Conexant Systems, Inc., a leading semiconductor supplier. The Carlyle Group invested in Jazz Semiconductor to facilitate the company's transition from a captive manufacturing facility within Conexant to an independent semiconductor foundry. The transition has been successfully completed and has resulted in the expansion of Jazz Semiconductor's business from a few customers at its inception to over 300 design wins with more than 95 customers to date.

Acquicor is a company formed by Gilbert F. Amelio, Ph.D., Ellen M. Hancock and Steve Wozniak for the purpose of acquiring, through a merger, capital stock exchange, stock purchase, asset acquisition or other similar business combination, one or more domestic and/or foreign operating businesses in the technology, multimedia and networking sectors. Acquicor raised gross proceeds of $172.5 million through its March 2006 initial public offering, and $164.3 million was placed in a trust account pending the completion of a business combination.

Acquicor intends to fund the purchase price and its transaction costs and to provide additional capital for the growth and expansion of Jazz Semiconductor's business through a combination of cash in the trust account, and third party financing. Wachovia Capital Finance (Western) has provided a commitment letter for a $65 million credit facility for the merged entity. The selling shareholders have agreed to provide up to $80 million of seller financing to complete the transaction, if necessary.

Upon completion of the merger, Jazz Semiconductor will become a wholly owned subsidiary of Acquicor. Because Acquicor is a publicly traded company, privately-held Jazz Semiconductor will no longer pursue its planned initial public offering and will withdraw its registration statement filed with the Securities and Exchange Commission.