Renesas Electronics To Buy Intersil For Equity Value Of About $3.2 Bln

(RTTNews) - Renesas Electronics Corp. (RNECF) said that it agreed to acquire Intersil Corp. (ISIL) for US$22.50 per share in cash, representing an aggregate equity value of about US$3.2 billion or about 321.9 billion yen at an exchange rate of 100 yen to the dollar.

The transaction has been unanimously approved by the boards of directors of both companies. Closing of the transaction is expected in the first half of 2017, following approval by Intersil shareholders and the relevant governmental authorities. Renesas said that the transaction will be financed with cash-on-hand.

The acquisition is also expected to expand Renesas' product portfolio, particularly for analog devices, where the market is expected to increase by approximately US$3.9 billion by 2020.

Renesas anticipates near- and long-term revenue expansion opportunities combined with the modest anticipated cost efficiencies associated with greater scale will eventually generate synergies of US$170 million. The transaction is expected to immediately increase both gross and operating margins and be accretive to Renesas' non-GAAP earnings per share and free cash flows after closing.

ISIL closed Monday's regular trading at $19.77, up $0.41 or 2.12 percent. In the after-hours, the stock further gained $1.45 or 7.34 percent.