Infineon Technologies To Buy International Rectifier For $3 Bln

(RTTNews) - International Rectifier Corp. (IRF) Tuesday said it has agreed to be acquired by German chip maker Infineon Technologies AG (IFNNY.PK, IFX) for about $3 billion in cash. Shares of International Rectifier soared over 47 percent, following the news.

Separately, semiconductor maker International Rectifier also reported a swing to fourth-quarter profit from a loss a year ago, due mainly to an 8 percent revenue growth and sharp increase in gross margins.

Infineon has agreed to pay $40 a share for International Rectifier in an all-cash deal expected to be completed by late 2014 or early 2015, subject to regulatory approvals. The purchase price represents a premium of about 51 percent over International Rectifier's closing price yesterday. The deal has been approved by the boards of both companies.

"The acquisition of International Rectifier is a unique opportunity. With their great knowledge of specific customer needs and their application understanding, International Rectifier employees will contribute to Infineon's strategic development from product thinking to system understanding and system solution," Reinhard Ploss, CEO of Infineon Technologies AG, said.

Infineon said the acquisition is expected to be accretive to proforma earnings in the fiscal year of closing. Synergies are expected to drive significant accretion going forward.

Infineon plans to fund the acquisition using cash-on-hand and fully underwritten credit facilities of Euro 1.5 billion.

El Segundo, California-based International Rectifier reported fourth-quarter net income of $12.9 million or $0.18 per share, compared with last year's loss of $6.1 million or $0.09 per share last year.

Adjusted earnings for the quarter was $21.9 million $0.30 per share. On average, six analysts polled by Thomson Reuters expected an earnings of $0.29 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the three-month period grew 7.6 percent to $297.6 million from $276.5 million last year. Analysts had a consensus revenue estimate of $288.69 million for the quarter.

Gross margin, or percentage of sales left after deducting production costs, rose to 35.6 percent from 30.0 percent last year.

IRF is currently trading at $39.08, up $12.52 or 47.12%, on the NYSE.