Littelfuse to acquire IXYS in cash and stock transaction
Littelfuse (LFUS) and IXYS (IXYS) announced that they have entered into a definitive agreement under which Littelfuse will acquire all of the outstanding shares of IXYS in a cash and stock transaction.
The transaction represents an equity value of approximately $750M and enterprise value of $655M. Under the terms of the agreement, each IXYS stockholder will be entitled to elect to receive, per IXYS share, either $23.00 in cash or 0.1265 of a share of Littelfuse common stock, subject to proration.
In total, 50% of IXYS stock will be converted into the cash election option and 50% into the stock election option.
IXYS is a global pioneer in the power semiconductor and integrated circuit markets with a focus on medium to high voltage power control semiconductors across the industrial, communications, consumer and medical markets.
IXYS has a broad customer base, serving more than 3,500 customers through its direct salesforce and global distribution partners.
IXYS reported revenues of $322M in its fiscal 2017 with an adjusted EBITDA margin of approximately 13.5%.
The transaction is expected to be immediately accretive to Littelfuse’s adjusted earnings per share and free cash flow in the first full year post transaction close, excluding any acquisition and integration related costs.
Littelfuse expects to achieve more than $30 million of annualized cost savings within the first two years after closing the transaction.
Longer term, the combination is also expected to create significant revenue synergy opportunities given the companies’ complementary offerings, as well as benefits from future tax rate reduction.
In conjunction with the definitive agreement, Dr. Nathan Zommer, IXYS founder and currently the company’s largest stockholder with approximately 21% ownership, has entered into a voting and support agreement.
Subject to the agreement’s terms and conditions, he has agreed to vote his shares in favor of the transaction.
After close of the transaction, Dr. Zommer is expected to join Littelfuse’s Board of Directors, subject to the board’s governance and approval process. His technical skills and extensive experience across the semiconductor industry will benefit the combined company with its integration efforts, innovation roadmap and revenue expansion.
The transaction is expected to close in the first calendar quarter of 2018 and is subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by IXYS stockholders.
Littelfuse expects to finance the cash portion of the transaction consideration through a combination of existing cash and additional debt.
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