Maxim Announces Plans to Buy Dallas Semiconductor for $2.5 Billion
Maxim Integrated Products Inc. (Sunnyvale, CA) stated it will buy Dallas Semiconductor Corp. (Dallas, TX) for about $2.5 billion in stock, giving it control of a specialty semiconductor market.
The deal values Dallas Semiconductor at about $39.13 a share, based on Maxim's closing stock price on Friday. The number of Maxim shares offered will vary from 40 million to 42 million, if Maxim's shares close above an average of $61 each, or below an average of $52 during the 10 trading days that end two days before the deal closes.
Maxim said it will cancel its existing stock repurchase plan because of the deal and expects the acquisition to add slightly to 2001 results. It said it will issue $2.5 billion in stock to pay for all of Dallas Semiconductor's shares outstanding and stock options.
“Dallas Semiconductor has many product lines that are complementary to Maxim's, and we look forward to giving more visibility to Dallas Semiconductor's excellent digital and mixed-signal circuits in both the domestic and the international marketplaces," Maxim Chief Executive Jack Gifford said in a statement.
Dallas Semiconductor Chairman, Chief Executive and President C.V. Protho died suddenly of a heart attack in November. “They didn't have a CEO and that was one factor (in Dallas Semiconductor's decision to be acquired)," said Baldwin Anthony McIntyre analyst Eric Boyce. “They had a very strong and charismatic founder at the helm and when he passed away it woke them up that they didn't have a succession plan," said Boyce.
Another company founder, Chao Mai, stepped in as president and COO days after Protho's death. Mai said in a statement, “After careful deliberation, emphasizing leadership, engineering, culture and product line fit, we chose Maxim as the right partner. We believe that Maxim's worldwide selling, applications and marketing strength should further enhance Dallas Semiconductor's revenue growth and gross margins."