Skyworks Solutions Inc., an innovator of high reliability analog and mixed signal semiconductors enabling a broad range of end markets, signed a definitive agreement to purchase Advanced Analogic Technologies Inc., an analog semiconductor company focused on enabling energy-efficient devices for consumer electronics, computing and communications markets. This acquisition expands Skyworks’ portfolio with highly complementary analog semiconductor products including battery chargers, DC/DC converters, voltage regulators and LED drivers. The analog power management market is expected to grow to $12.1 B in 2014, up from $9.9 B in 2010, according to Gartner market research.
“Skyworks’ acquisition of Advanced Analogic Technologies will enable us to further capitalize on our strong smart phone, tablet, set-top box and infrastructure positions with an expanded and differentiated product portfolio while accelerating our entry into new vertical markets,” said David J. Aldrich, President and Chief Executive Officer of Skyworks. “At a higher level, analog power management semiconductors represent a strategic growth market for Skyworks as our customers increasingly demand both ubiquitous wireless connectivity and power optimization across seemingly every kind of electronic platform. With Advanced Analogic Technologies, Skyworks will be well positioned to address these massive twin market opportunities leveraging our broad customer relationships, innovative product portfolios and increasing operational scale.”
“The Advanced Analogic Technologies team is excited to be joining forces with Skyworks given their leadership market positions coupled with scale advantages,” said Richard K. Williams, President, Chief Executive Officer and chief technical officer of Advanced Analogic Technologies. “Both companies share a common vision of the enormity and growth potential of the analog semiconductor market. Together, we can better address our customers’ demand for highly integrated power management solutions across a broader range of markets and applications. We believe this transaction will benefit our customers, employees and, most importantly, our shareholders.”
Skyworks has entered into a definitive agreement to acquire Advanced Analogic Technologies for a nominal price of $6.13 per share, representing a 52 percent premium to Advanced Analogic Technologies’ 30-day trailing average. The $6.13 nominal share price consists of $3.68 per share in cash and .08725 of a share of Skyworks common stock for each outstanding share of Advanced Analogic Technologies common stock. The amount of stock is based upon the average closing price of Skyworks common stock over the 30-trading days prior to May 26, 2011. At that average price, the stock component of the price has a nominal value of $2.45. The value of the stock component will be tested again at closing, based on the average closing price of Skyworks common stock during the five trading days prior to the closing. If the average pre-closing value is lower than $2.45, the amount of cash per share will be increased by the difference, and if the average pre-closing value is higher than $2.45, the amount of cash per share will be reduced by the difference, to maintain a calculated nominal value of $6.13 per Advanced Analogic Technologies share in either case.
The transaction is subject to approval by Advanced Analogic Technologies’ shareholders. The transaction is also subject to other customary closing conditions, including the receipt of applicable regulatory approvals. Excluding any non-recurring acquisition related charges and amortization of acquired intangibles, Skyworks expects the acquisition to be immediately accretive to non-GAAP earnings post-closing and will finalize estimates of the transaction’s financial impact, as well as the accounting for the transaction, upon deal close.