Analog Devices Acquires Maxim Integrated Products

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  • Maxim stockholders will receive 0.630 of a share of ADI common stock for each share of Maxim common stock they hold at the closing of the transaction
  • ADI stockholders will own approximately 69 percent of the combined company, while Maxim stockholders will own approximately 31 percent

Analog Devices Inc (ADI) and Maxim Integrated Products have announced that they have entered into a definitive agreement under which Analog Devices will acquire Maxim in an all-stock transaction that values the combined enterprise at over $68 billion. Under the terms of the agreement, Maxim stockholders will receive 0.630 of a share of ADI common stock for each share of Maxim common stock they hold at the closing of the transaction.

They said that this will strengthen ADI as an analog semiconductor leader with increased breadth and scale across multiple end markets. Upon closing, two Maxim directors will join ADI’s Board of Directors. It includes Maxim President and CEO, Tunç Doluca.

Tunç Doluca, President and CEO of Maxim Integrated said, “For over three decades, we have based Maxim on one simple premise – to continually innovate and develop high-performance semiconductor products that empower our customers to invent. I am excited for this next chapter as we continue to push the boundaries of what’s possible, together with ADI. Both companies have strong engineering and technology know-how and innovative cultures. Working together, we will create a stronger leader, delivering outstanding benefits to our customers, employees, and shareholders.”

Expected revenue of $8.2 billion

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Upon closing, current ADI stockholders will own approximately 69 percent of the combined company, while Maxim stockholders will own approximately 31 percent. They said that the transaction is intended to qualify as a tax-free reorganisation for U.S. federal income tax purposes.

Vincent Roche, president, and CEO of ADI said, “Today’s exciting announcement with Maxim is the next step in ADI’s vision to bridge the physical and digital worlds. ADI and Maxim share a passion for solving our customers’ most complex problems, and with the increased breadth and depth of our combined technology and talent, we will be able to develop more complete, cutting-edge solutionsMaxim is a respected signal processing and power management franchise with a proven technology portfolio and impressive history of empowering design innovation. Together, we are well-positioned to deliver the next wave of semiconductor growth, while engineering a healthier, safer, and more sustainable future for all.”

The companies said that the combination will strengthen ADI’s analog semiconductor leadership position with an expected revenue of $8.2 billion and a free cash flow of $2.7 billion n a pro forma basis. They also said that this deal is expected to be accretive to adjusted EPS in 18 months subsequent to closing with $275 million of cost synergies by the end of year two, driven primarily by lower operating expenses and cost of goods sold. Additional cost synergies from manufacturing optimization are expected to be realized by the end of year three subsequent to closing.

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