MaxLinear Inc, a maker of chips for broadband communications, has agreed to acquire Silicon Motion Technology Corp (慧榮科技) in a cash-and-stock deal valuing the Taiwanese semiconductor firm at US$3.8 billion.
California-based MaxLinear is offering the equivalent of US$114.34 for each of Silicon Motion’s US depositary receipts, the companies said in a statement on Thursday.
The proposal includes US$93.54 in cash and 0.388 MaxLinear shares.
Photo: Liao Hsueh-ju, Taipei Times
The bid represents a 48 percent premium to Silicon Motion’s closing price on April 22, the last trading day before the company was first reported to be exploring a sale. The deal creates a company valued at about US$8 billion including debt, the statement said.
MaxLinear shareholders are to own about 86 percent of the combined company, it said.
Silicon Motion’s US depositary receipts jumped about 30 percent in pre-market trading on Thursday in New York. They were up 17 percent to US$94.83 at 2:24pm in New York trading, giving the company a market value of about US$3.3 billion.
MaxLinear’s shares were down 22 percent to US$41.61, their biggest drop since March 2020. The plunge was part of a larger market decline in which the NASDAQ fell 5 percent.
Silicon Motion makes NAND flash controllers for solid-state storage devices. It also supplies data center drives, and specialized drives for industry and vehicles. The company had also attracted interest from Taiwan-based MediaTek Inc (聯發科), people with knowledge of the matter said.
The acquisition is the largest to date for MaxLinear, Bloomberg data showed.
The deal is expected to close by the first half of next year, subject to regulatory clearance and the approval of Silicon Motion shareholders.
The transaction would generate annual run-rate synergies of about US$100 million within 18 months after closing, and provide an immediate material boost to MaxLinear’s earnings per share and cash flow, the statement said.
Bank of Montreal was the exclusive financial adviser to MaxLinear, while Wells Fargo & Co is providing committed debt financing. Goldman Sachs Group Inc acted as an exclusive financial adviser to Silicon Motion.
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