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ON Semi To Acquire CPU Voltage & PC Thermal Monitoring Business From Analog Devices

November 19, 2007 by Jeff Shepard

ON Semiconductor Corp. announced that it has signed a definitive agreement to acquire voltage regulation and thermal monitoring products for computing applications from Analog Devices, Inc. (ADI). Pursuant to the agreement, ON Semiconductor will acquire certain assets and intellectual property related to the product line and will enter into a one-year manufacturing supply arrangement for a total consideration value of approximately $185 million in cash. This amount also includes consideration for the one-year manufacturing supply arrangement. These products represented approximately $80 million in revenue for ADI through the twelve months ended Nov. 3, 2007.

"The technical expertise of the staff is a critical aspect of this transaction," said Keith Jackson, ON Semiconductor President and CEO. "This additional talent will help ON Semiconductor expand its overall computing power management business and accelerates our notebook power management revenue growth. Along with the products and technology, this team complements ON Semiconductor’s existing Computing Products Group and will provide increased value-add and scale to our customers."

Pursuant to the agreement, ON Semiconductor will also acquire several ADI issued patents and patent applications related exclusively to the business and receive appropriate intellectual property licenses from ADI in order to continue to conduct and grow the business.

The acquisition is expected to close in December upon the satisfaction of regulatory requirements and other customary closing conditions. Upon closing, ON Semiconductor may record a one-time charge for purchased in-process research and development expenses and other deal related costs. The amount of that charge, if any, has not yet been determined.

ADI stated that the divestiture is consistent with its ongoing transition of its power management portfolio to high-performance products that complement the company’s portfolio of signal-processing solutions for industrial, medical and scientific instrumentation, as well as communications infrastructure and consumer electronics.

"This agreement allows us to further focus our power management team on areas such as portable medical devices, wireless infrastructure equipment, and digital TVs, where ADI has outstanding systems expertise and an unparalleled reputation for delivering high performance signal processing solutions," said Peter Henry, ADI’s VP for Power Management Products. "Power considerations play an important role with customers as they look for ways to improve the sound, picture, and connectivity features, as well as the battery life of their products. With a complementary portfolio of power management products, ADI can help customers innovate and achieve new levels of differentiation from their signal processing subsystems."