Microchip Technology Announces Plans to Buy TelCom Semiconductor
Microchip Technology Inc. (Chandler, AZ) announced that it plans to buy TelCom Semiconductor Inc. (Mountain View, CA) in a stock deal valued at about $300.0 million dollars and aimed at expanding its portfolio of stand-alone analog products. The transaction is expected to be completed during the first quarter of 2001 and immediately add to Microchip's earnings, the companies reported.
Under the terms of the deal, if the average closing price of Microchip's common stock for the 10 trading days preceding the closing of the transaction is between $28.30 and $32.61, Microchip will issue a number of shares of its common stock for each outstanding share of TelCom equal to $15 divided by a 10-day average price.
If, however, Microchip's 10-day average closing price prior to the merger is less than $28.30, then each TelCom stockholder will receive 0.53 shares of Microchip. If the 10-day average price is greater than $32.61, then each TelCom stockholder will receive 0.46 shares of Microchip.
"TelCom brings to us a highly synergistic portfolio of analog products that will accelerate our ability to capture this significant revenue opportunity," commented Steve Sanghi, Microchip's president and CEO. "Together, we will expand Microchip's analog product portfolio and accelerate our microcontroller-attach strategy much faster than either of us could do alone."