- Buyers Guide
RF Micro Devices Inc. (RFMD) has entered into a definitive agreement with Filtronic Plc to acquire its wholly owned subsidiary, Filtronic Compound Semiconductors Ltd. (FCSL), for approximately £12.5 M in cash. The acquisition price includes the purchase of FCSL’s six-inch GaAs wafer fabrication facility at Newton Aycliffe, UK, which is currently a major supplier of GaAs pHEMT semiconductors to RFMD, along with the purchase of the company’s millimetre-wave RF semiconductor business. The transaction is expected to be completed before the end of RFMD’s fourth fiscal quarter, ending in March 2008, subject to customary closing conditions. “The acquisition of Filtronic Compound Semiconductors is expected to increase our manufacturing volume, lower our overall cost structure and provide RFMD with a high-volume supply of GaAs pHEMT,” said Bob Bruggeworth, RFMD’s president and CEO.
RFMD expects the addition of FCSL’s high-volume GaAs fab to significantly reduce its GaAs pHEMT sourcing costs and provide additional capacity, thereby providing the company the opportunity to capture incremental revenue that otherwise might be subject to capacity constraints during calendar year 2008. Additionally, the company expects the addition of Filtronic Compound Semiconductors’ millimetre-wave business to strengthen the product portfolio of its recently formed Multi-Market Products Group and be accretive to its target margin profile for its multi-market business.
The agreement provides for ongoing supply to Filtronic’s point-to-point business for at least three years and for it remaining at its current site. Following completion Filtronic will cease its activities in compound semiconductor manufacture and supply. FCSL will enter into a supply contract and lease, including provision of support services to its point-to-point business.