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5G and IoT Supplement
Tower Semiconductor Ltd., an independent specialty wafer foundry, and Jazz Technologies Inc., a leader in analog-intensive mixed signal (AIMS) foundry solutions, announced the signing of a definitive agreement by which Tower will acquire all of the outstanding shares of Jazz in a stock-for-stock transaction valuing Jazz at a fully diluted equity value of approximately $40 M, based on Tower’s closing price on NASDAQ on May 19, 2008. Under the terms of the agreement, each outstanding share of Jazz common stock will be converted into the right to receive 1.8 Tower ordinary shares. The total value of the transaction, including net debt, is approximately $169 M.
“The acquisition of Jazz is an excellent strategic fit for Tower – it creates economies of scale which allows for improved margins and strongly complements our specialty process offering, transforming us into the leading specialty pure-play foundry,” said Russell Ellwanger, CEO of Tower. “We are confident that we will realize significant benefits and synergies, including a comprehensive process portfolio which expands our addressable market and fuels a growing and more diversified customer base with highly differentiated product platforms.”
"Over the past few months, our Board has carried out a review of various strategic alternatives to enhance stockholder value and this definitive agreement is the result of that process,” said Gil Amelio, chairman and CEO of Jazz. “Jazz’s management looks forward to working with Tower in the coming months to successfully implement the transaction.”
“We are excited about the potential of joining together with Tower and believe Jazz’s shareholders, customers, employees and other stakeholders will benefit from the enhanced growth, profitability and cash flow prospects of the combined company,” said Paul Pittman, chief financial and administrative officer of Jazz.
Tower and Jazz are highly complementary and the transaction is expected to offer significant benefits to customers and shareholders:
• The combined company will be an industry leader, bringing together Tower’s strength in CMOS Image Sensor, Non-Volatile Memory (NVM) and RF CMOS with Jazz’s expertise in Mixed Signal, Power Management (CMOS and BCD) and RF (RF CMOS, SiGe and BiCMOS) to create one of the broadest portfolios of specialty process technologies.
• With operational facilities now spanning the globe (United States, Israel and China), the combined company offers capacity of approximately 750,000 wafer starts annually (8" equivalents).
• Revenue enhancements and increased efficiencies in manufacturing and purchasing are expected to result in substantial synergies of up to $40 M annually.
The agreement has been unanimously approved by the boards of directors of both Tower and Jazz and the transaction is subject to the approval of Jazz’s shareholders and other customary closing conditions. The transaction is expected to close in the second half of 2008.
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