Microsemi

Founded in 1960, the company is one of the manufacturers of semiconductor components for a wide range of applications. Microsemi has its own production facilities located in the United States, Ireland and China. The main markets in which Microsemi operates are avionics and space, special-purpose systems, telecommunications, data processing and storage systems, industrial systems, medical equipment.

The range of manufactured products is extensive and includes high-performance and radiation-resistant analog, digital and digital-analog microcircuits, PLIS (FPGA), on-chip systems and custom chips, power controls, timing and time devices, audio processing devices, a wide range of RF/microwave elements, discrete elements, data storage and switching systems, Ethernet and PoE microcircuits, and custom systems.

History

2018: Microchip Technology buys Microsemi for $8.35 billion

In early March 2018, the American semiconductor company Microchip Technology announced the purchase of Microsemi for $8.35 billion. This transaction continued consolidation in the chip market.

Under the terms of the agreement, Microchip will pay from its own but borrowed funds (without providing its shares) at $68.78 for each share of Microsemi, which is 7% more than the quotation rate the day before the deal was announced. Taking into account debts, the value of the transaction exceeds $10 billion.

Microchip Technology agrees to buy Microsemi for $8.3 billion

After the sale of Microsemi was announced, the company's securities rose 5% to $67.55. Microchip quotes increased by 5%, reports Reuters.

All formalities related to the acquisition of Microsemi by Microchip are planned to be completed in the second quarter of 2018. After that, the purchase will immediately begin to increase Microchip's profit. Thanks to the transaction, the company expects to save $300 million in the third year after official registration.

J.P. Morgan agreed to provide Microchip with a $5.6 billion loan to finance the transaction, and also acted as the company's financial advisor. Qatalyst Partners advises Microsemi.

Microsemi and Microchip develop complementary businesses, and they mainly focus on different areas. Microsemi manufactures microcircuits for communications, aerospace and defense. Microchip, in turn, specializes in semiconductors for industry, automobiles and household appliances.

Microsemi, which has grown strongly over the years thanks to acquisitions, said it expects to expand its presence in the aerospace and defense industries by joining Microchip. True, these markets bring Microchip only 2% of revenue.

In addition, the deal is expected to strengthen Microchip's position in the computing and communications solutions sectors, which account for less than 15% of the company's sales.^[1]

Notes