MaxLinear, Inc. (NASDAQ: MXL), a provider of RF (radio frequency, mixed-signal integrated and analog circuits for broadband, infrastructure and connectivity markets, has executed a definitive purchase agreement with Silicon Motion (NASDAQ: SIMO) under which the former will acquire the latter in stock and cash deal with an enterprise value of $8 billion.
In the merger agreement, each of Silicon Motion’s American Depositary Shares, which represent four Silicon Motion ordinary shares, will get cash of $93.54 and 0.388 MaxLinear common stock shares, for an American Depositary Share of $114.34. This strategic business merger is expected to create a diversified tech portfolio and drive transformational change.
Details of the deal
Upon completion of the agreement, the new company will be in control of a highly-diversified tech portfolio with strong positions in the infrastructure, storage-end, broadband, and connectivity markets.
The blend of MaxLinear’s processing, analog/mixed-signal and radio frequency capabilities with SIMO’s NAND flash controller tech will help accelerate the company’s expansion efforts.
The combined company expects annual revenues of over $2billion and this notion is supported by the approximately $15 billion total market value.
The combined scale of the new company is set to offer additional resources, capabilities and technology to help improve operational efficiency, drive reduced manufacturing costs and boost product innovation efforts. Together, they’ll have expanded resources and capabilities to better support the new company’s customer relationships.
How does management feel?
MaxLinear Chief Executive Officer and Chairman, Kishore Seendripu, Ph.D, said:
The enhanced scale of the combined organization creates a new significant $2B+ player in the semiconductor industry with compelling positions across a diversified set of end-markets.
He added that the company has shown a robust track record of integration prowess.
SIMO Chief Executive and President, Wallace Kou, said:
combining Silicon Motion with MaxLinear creates significant economies of scale, accelerates our expansion into enterprise storage markets and unites unparalleled intellectual property to continue serving our customers with high-quality expertise and technical support.