MACOM Announces Definitive Agreement to Acquire AppliedMicro
Deal to Accelerate and Broaden Breakout in Cloud Data Centers;
Transaction Highlights Include:
-
Transaction valued at approximately
$770 million for AppliedMicro's approximately$165 million in TTM revenue (including the Compute business) and$82 million of cash and short-term investments atSeptember 30, 2016 -
MACOM and AppliedMicro's pro forma combined TTM revenue was
approximately
$709 million including AppliedMicro's Compute business, or approximately$644 million excluding the Compute business - AppliedMicro's Connectivity business is highly complementary to MACOM's product portfolio, through the addition of market-leading OTN framers, MACsec Ethernet networking components and the industry's leading single-lambda PAM4 platform
- Transaction to accelerate MACOM's significant growth in optical technologies for Cloud Service Providers and Enterprise Network customers serving the high-growth, high-margin Data Center market
- AppliedMicro's leadership PAM4 solutions based on FinFET technology and custom engagements with top-tier Data Center and service provider customers is expected to strengthen MACOM's competitive position with those customers
- MACOM expects to improve the profitability of AppliedMicro by divesting the Compute business and by delivering on substantial revenue and cost synergies
- Excluding the Compute business, MACOM expects this transaction to be accretive to its non-GAAP gross margin, non-GAAP operating margin and non-GAAP EPS, in MACOM's fiscal year ending September, 2017
-
MACOM to benefit from over
$600 million of tax net operating loss carry forwards
Commenting on the transaction,
"Notably, the IEEE recently recommended the adoption of AppliedMicro's single lambda PAM4 solution to be an industry standard for enterprise and Data Center connectivity, positioning this technology as the solution of choice going forward. Additionally, AppliedMicro's Connectivity business aligns well with MACOM's differentiated, high-growth business model, offering non-GAAP gross margins well in excess of MACOM's long term target operating model, long product life cycles, and sticky customer relationships."
"AppliedMicro also provides value-added technologies including SerDes, high speed analog-to-digital and digital-to-analog converters with industry-leading engineering competencies and long product lifecycles. Importantly, we expect that this transaction will establish MACOM with an incumbent position supplying strategic components and enterprise and cloud Data Center customers."
MACOM intends to divest AppliedMicro's well-positioned Compute business within 100 days from closing the transaction, as the business does not strategically align with MACOM's long-term focus. AppliedMicro has been exploring strategic options for the Compute business and there is known strategic interest among several potential buyers and investors. MACOM will continue to support Compute customers and partners during this transition.
"This is an exciting day for AppliedMicro, and we are pleased to be
joining forces with MACOM. The transaction affirms the value that our
employees have created and provides a strong path forward for our
Connectivity business while delivering AppliedMicro stockholders a
robust premium," said
MACOM intends to commence a tender offer to purchase each outstanding
common share of AppliedMicro for approximately
Evercore is acting as exclusive financial advisor and
Conference Call and Slide Presentation Information
MACOM will host a conference call on
When:
Time:
Dial
in: 1+(877) 837-3908; outside the
Participant
Code: 24085998
Live Webcast: http://ir.macom.com/events.cfm
For those unable to participate during the live broadcast, a replay will
be available shortly after the call and will be available on MACOM's
website for 7 days. The replay dial-in number is 1-(855) 859-2056 and
the pass code is 24085998. International callers should dial +1(404)
537-3406 and enter the same pass code at the prompt. Additionally, the
conference call will be broadcast live over the
Further details of the transaction are set out in MACOM's Current Report
on Form 8-K filed with the
About MACOM
MACOM enables a better-connected and safer world by delivering breakthrough semiconductor technologies for optical, wireless and satellite networks that satisfy society's insatiable demand for information.
Today, MACOM powers the infrastructure that millions of lives and
livelihoods depend on every minute to communicate, transact business,
travel, stay informed, and be entertained. Our technology increases the
speed and coverage of the mobile
Keeping us all safe, MACOM technology enables next-generation radars for air traffic control and weather forecasting, as well as mission success on the modern networked battlefield.
MACOM is the partner of choice to the world's leading communications infrastructure, aerospace and defense companies, helping solve their most complex challenges in areas including network capacity, signal coverage, energy efficiency, and field reliability, through its best-in-class team and broad portfolio of analog RF, microwave, millimeterwave, and photonic semiconductor products.
MACOM is a pillar of the semiconductor industry, thriving for more than 60 years of daring to change the world for the better, through bold technological strokes that deliver true competitive advantage to customers and superior value to investors.
Headquartered in
MACOM, M/
About AppliedMicro
Forward-Looking Statements and Use of Non-GAAP Financial Measures
DISCLOSURE NOTICE: This document contains forward-looking information related to MACOM, AppliedMicro and the proposed acquisition of AppliedMicro by MACOM that involves substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements in this document include, among other things, statements about the potential benefits of the proposed acquisition and the anticipated timing of closing of the acquisition. Risks and uncertainties include, among other things, risks related to the satisfaction of the conditions to closing the acquisition (including the failure to obtain necessary regulatory approvals) in the anticipated timeframe or at all, including uncertainties as to how many of AppliedMicro's stockholders will tender their shares in the tender offer and the possibility that the acquisition does not close; risks related to the ability to realize the anticipated benefits of the acquisition, including the possibility that the expected benefits from the proposed acquisition will not be realized or will not be realized within the expected time period; the risk that the businesses will not be integrated successfully; disruption from the transaction making it more difficult to maintain business and operational relationships; negative effects of this announcement or the consummation of the proposed acquisition on the market price of MACOM's common stock and on MACOM's operating results; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the proposed acquisition; other business effects, including the effects of industry, market, economic, political or regulatory conditions; future exchange and interest rates; changes in tax and other laws, regulations, rates and policies; future business combinations or disposals; the uncertainties inherent in research and development, including the ability to sustain and increase the rate of growth in revenues for AppliedMicro products; and competitive developments.
A further description of risks and uncertainties relating to MACOM and
AppliedMicro can be found in their respective Annual Reports on Form
10-K for the fiscal years ended
We make references in this presentation to certain financial information
calculated on a basis other than in accordance with accounting
principles generally accepted in
The information contained in this document is as of
Additional Information and Where to Find It
The exchange offer for the outstanding shares of AppliedMicro stock
described in this communication has not yet commenced. This announcement
is for informational purposes only and is neither an offer to purchase
nor a solicitation of an offer to sell shares, nor is it a substitute
for any materials that MACOM and its offering subsidiary,
Purchaser plans to file a tender offer statement on Schedule TO,
together with other related exchange offer documents, including a letter
of transmittal, in connection with the offer; AppliedMicro plans to file
a Recommendation Statement on Schedule 14D-9 in connection with the
offer; and MACOM plans to file a registration statement on Form S-4 that
will serve as a prospectus for MACOM stock to be issued as consideration
in the offer and the mergers. These documents will contain important
information about MACOM, AppliedMicro and the mergers. AppliedMicro
stockholders are urged to read these documents carefully and in their
entirety when they become available before making any decision regarding
exchanging their shares. These documents will be made available to
AppliedMicro stockholders at no expense to them and will also be
available for free at the
In addition to the
View source version on businesswire.com: http://www.businesswire.com/news/home/20161121005508/en/
Company Contact:
Chief Financial Officer
bob.mcmullan@macom.com
or
MACOM
Investor Relations Contact:
Leanne K.
Sievers, 949-224-3874
EVP
or
Vice
President
sheltonir@sheltongroup.com
or
AppliedMicro
Investor Relations Contact:
Managing Director
suzanne@blueshirtgroup.com
Source:
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