Microchip’s $10.15 Billion Acquisition of Microsemi

J.P. Morgan is acting as Microchip’s exclusive financial advisor and is providing $5.6 billion in committed financing. Wilson Sonsini Goodrich & Rosati, P.C. is acting as Microchip’s legal advisor. Qatalyst Partners is acting as exclusive financial advisor to Microsemi. O’Melveny & Myers LLP is acting as Microsemi’s legal advisor.

Microchip Technology Incorporated (NASDAQ:MCHP) and Microsemi Corporation (NASDAQ:MSCC) have signed a definitive agreement pursuant to which Microchip will acquire Microsemi for $68.78 per share in cash.

The acquisition price represents a total equity value of about $8.35 billion, and a total enterprise value of about $10.15 billion, after accounting for Microsemi’s cash and investments, net of debt, on its balance sheet at December 31, 2017.

Following the closing, the transaction is expected to be immediately accretive to Microchip’s non-GAAP earnings per share. Based on currently available information, Microchip anticipates achieving an estimated $300 million in synergies in the third year after close of transaction. Microchip plans to finance the transaction with approximately $1.6 billion of cash from the combined company balance sheets, approximately $3.0 billion from Microchip’s existing line of credit, approximately $5.0 billion in new debt and $0.6 billion of a cash bridge loan.

The Board of Directors of each company has unanimously approved the acquisition. Subject to approval by Microsemi stockholders, customary regulatory approvals and other closing conditions, the transaction is expected to close in the second quarter of calendar 2018.

Microchip Technology Inc. (NASDAQ: MCHP) is a leading provider of microcontroller, mixed-signal, analog and Flash-IP solutions, providing low-risk product development, lower total system cost and faster time to market for thousands of diverse customer applications worldwide. The company, led by Steve Sanghi, Ganesh Moorthy and J Eric Bjornholt, in 2017 recoreded $3.407 Billion Revenues.

Microsemi Corporation (Nasdaq:MSCC) offers a comprehensive portfolio of semiconductor and system solutions for aerospace & defense, communications, data center and industrial markets. The company led by James J Peterson, Paul H Pickle and John W Hohener, in 2017 recorded $1.811 Million Revenues.

Wilson Sonsini Goodrich & Rosati advised Microchip Technology with a team including Robert Ishii, Patrick Sandor, Matthew Baudler, Erin Malone-Shkurkin (M&A), Robert Suffoletta (Capital Markets), Kathleen Rothman, Jill Fulwiler (Finance), Madeleine Boshart, Lucericia Messiah (Employee Benefits and Compensation), James Clessuras, Barath Chari (IP&IT), Mark Fitzgerald, Mark Bass (Government Contracts) and Eileen Marshall (Tax).

The O’Melveny team was led by partners Warren Lazarow (SV) and Mark Easton (LA), counsel Angola Russell (NY), and associates Adam Ackerman (LA) and Lauren Jaeger (LA). Partner Jeff Walbridge (NB), senior counsel Warren Fox (SF), and associate Rebecca Cottrell (NB) advised on employee benefits matters, partner Bob Fisher (SV) advised on tax matters, and partner Courtney Dyer (DC) is advising on HSR matters.

 

Involved fees earner: Robert Ishii – Wilson Sonsini Goodrich & Rosati; Patrick Sandor – Wilson Sonsini Goodrich & Rosati; Matthew Baudler – Wilson Sonsini Goodrich & Rosati; Robert Suffoletta Jr. – Wilson Sonsini Goodrich & Rosati; Kathleen Rothman – Wilson Sonsini Goodrich & Rosati; Jill Fulwiler – Wilson Sonsini Goodrich & Rosati; Madeleine Boshart – Wilson Sonsini Goodrich & Rosati; Lucericia Messiah – Wilson Sonsini Goodrich & Rosati; James Clessuras – Wilson Sonsini Goodrich & Rosati; Barath Chari – Wilson Sonsini Goodrich & Rosati; Mark Fitzgerald – Wilson Sonsini Goodrich & Rosati; Mark Bass – Wilson Sonsini Goodrich & Rosati; Eileen Marshall – Wilson Sonsini Goodrich & Rosati; Warren Lazarow – O’Melveny & Myers LLP; Mark Easton – O’Melveny & Myers LLP; Angola Russell – O’Melveny & Myers LLP; Adam Ackerman – O’Melveny & Myers LLP; Lauren Jaeger – O’Melveny & Myers LLP; Jeff Walbridge – O’Melveny & Myers LLP; Warren Fox – O’Melveny & Myers LLP; Rebecca Cottrell – O’Melveny & Myers LLP; Robert Fisher – O’Melveny & Myers LLP; Courtney Dyer – O’Melveny & Myers LLP;

Law Firms: Wilson Sonsini Goodrich & Rosati; O’Melveny & Myers LLP;

Clients: Microsemi Corporation; Microchip Technology Inc;

 

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Author: Ambrogio Visconti