Microchip Tech. To Buy Taiwan-based ISSC Technologies

(RTTNews) - Semiconductor company Microchip Technology Inc. (MCHP) Thursday said it will acquire ISSC Technologies Corp., a provider of low power blue-tooth and advanced wireless solutions for the Internet Of Things market, for a total equity value of about $328.5 million and enterprise value of about $294.3 million.

Under the agreement, Microchip will launch a tender offer to buy all of the outstanding shares of ISSC for about $4.74 per share, based on an assumed exchange rate of NT$30.15 per US$ in cash, and buy any remaining shares pursuant to a follow-on merger at NT$143 per share minus any dividends paid by ISSC prior to the close of the transaction.

After completion of the tender offer, the acquisition is expected to be accretive to Microchip's non-GAAP earnings per share in the first quarter.

Commenting on the acquisition, Steve Sanghi, Microchip's President and CEO said: "This transaction represents the first major overseas acquisition by Microchip and the purchase will be funded with a portion of Microchip's foreign cash and will not require any additional borrowings from our line of credit. We believe the combination of a very strategic transaction that provides low power Bluetooth technology, ISSC's strengths and capabilities and our use of foreign cash makes this a compelling transaction for the shareholders of both companies."

The tender offer is expected to close in the third quarter of calendar 2014 and the follow-on merger is expected to close in the fourth quarter of calendar 2014, said the company.