Integrated Device Technology (IDT) to acquire PLX. Under
the terms of the agreement, unanimously approved by the
boards of directors of both companies, IDT will acquire
all of the outstanding shares of PLX common stock pursuant
to an exchange offer, followed by a second step merger.
In the acquisition, PLX stockholders will receive (i) $3.50
in cash and (ii) 0.525 shares of IDT common stock for each
PLX common share outstanding. Based on IDT's closing stock
price on April 27, 2012, the transaction is valued at approximately
$7.00 per PLX share and results in a total transaction value
of approximately $330 million.
"The proposed acquisition of PLX Technology represents
an exciting expansion of IDT's core serial switching and
interface business," said Ted Tewksbury, president
and CEO at IDT. "Our two companies have complementary
product sets, technologies and customer bases, and we share
a focus on delivering the highest-performance system-level
interconnect solutions for data centers and other applications.
IDT and its shareholders will benefit from the top-line
contribution of our enhanced product portfolio as well as
the increased profitability provided through the added scale
and expanded operating margin. This transaction is aligned
with our long-term strategy of expanding our core businesses
through organic growth and acquisitions."
"This proposed transaction will enable our stockholders
to realize significant value today and benefit from the
many growth and cost reduction opportunities of the combined
company," said Ralph Schmitt, president and CEO at
PLX. "We expect that a transaction with IDT will enhance
PLX's commitment to its customers to deliver innovative
technologies that meet their needs and demands."
As a result of the combination, IDT anticipates it will
achieve total run-rate cost synergies, excluding transaction
related charges, in excess of $35 million by fiscal year
2014. IDT currently projects the transaction to be accretive
to non-GAAP earnings by the third fiscal quarter of 2013
with more significant accretion by fiscal year 2014, in
each case based on an assumed closing during the first fiscal
quarter of 2013. Increased scale and expected cost savings
are expected to lower combined non-GAAP operating expenses,
generate significant operating margin expansion, and accelerate
IDT's timing to achieving its stated target operating model.
The companies expect that the proposed transaction will
close as early as IDT's first fiscal quarter 2013, which
is the second quarter of calendar 2012. The exchange offer
is subject to customary closing conditions, including the
tender into the exchange offer by PLX stockholders of shares
representing at least a majority of the outstanding shares
of PLX common stock on a fully diluted basis, and the expiration
or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act. IDT expects
to finance the cash portion of the acquisition through existing
cash balances and committed financing. The proposed transaction
is not subject to any financing condition.
Under the terms of the merger agreement, PLX may solicit
superior proposals from third parties for a "go shop"
period of 30 calendar days continuing through May 30, 2012.
It is not anticipated that any developments will be disclosed
with regard to this process unless PLX's board of directors
makes a decision with respect to a potential superior proposal.
Deutsche Bank, which is acting as PLX's financial advisor,
will advise PLX during the go shop period. There are no
guarantees that this process will result in a superior proposal.
The merger agreement provides IDT with a customary right
to match a superior proposal. The agreement also provides
for certain break-up fees payable to IDT in connection with
the termination of the agreement in certain circumstances.
J.P. Morgan is acting as financial advisor and Latham &
Watkins LLP is acting as legal advisor to IDT. Deutsche
Bank is acting as financial advisor and Baker & McKenzie
LLP is acting as legal adviser to PLX.
Integrated Device Technology has also acquired Fox Electronics,
a leading global supplier of frequency control products
(FCPs), in an all-cash transaction for approximately $30
million, of which $26 million was paid at closing. Fox Electronics'
revenue was approximately $23 million in calendar year 2011,
and the company is profitable.
"Fox's crystal, crystal oscillator and innovative
XpressO products combined with IDT's award-winning CrystalFree
solutions make us the industry's most comprehensive one-stop
shop for frequency control products," said Ted Tewksbury,
president and CEO at IDT. "In addition, Fox helps accelerate
the adoption of CrystalFree by enabling customers to purchase
pMEMS and CMOS solid-state oscillators alongside traditional
quartz-based components through an established and trusted
"Everyone within Fox Electronics is enthusiastic about
this exciting new direction with IDT," said E.L. Fox,
Jr., president at Fox Electronics. "With IDT's frequency
control products, including CrystalFree technology, and
their number one position in silicon timing, Fox's product
portfolio and industry leadership in the frequency control
market will be a great fit."
Fox makes quick-turn oscillator products, quartz crystals,
voltage-controlled crystal oscillators and more.