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2 November 2015

PMC receives increased unsolicited offer of $11.88 per share from Microsemi

PMC-Sierra Inc of Sunnyvale, CA, USA (which provides semiconductor and software solutions for storage, optical and mobile networks) has received an increased unsolicited offer from Microsemi Corp of Aliso Viejo, CA, USA (which makes chips for the communications, security, aerospace and industrial markets) to acquire PMC for $9.04 in cash and 0.0771 of a Microsemi share for each share of PMC common stock (amounting to $11.88 per PMC share, based on the closing stock price of Microsemi common stock on 29 October). This values PMC at $2.3bn, net of PMC's net cash balance as of 27 September.

PMC previously announced on 30 October an amended and restated merger agreement for analog and mixed-signal semiconductor maker Skyworks Solutions Inc of Woburn, MA, USA to acquire it for $11.60 in cash per share of PMC common stock. This followed Skyworks' initial offer on 5 October of $10.50 per share, after which Microsemi made its initial rival unsolicited offer amounting to $11.35 per share.

PMC's board of directors is evaluating Microsemi's proposal and has not made a determination as to whether it constitutes a superior proposal under the terms of PMC's merger agreement with Skyworks. However, after consultation with its financial advisors and outside legal counsel, PMC's board believes that the Microsemi proposal would reasonably be expected to lead to a superior proposal, and that the failure to participate in discussions with Microsemi would be inconsistent with the board's fiduciary duties, so it has determined to engage in discussions. There can be no assurances that any definitive agreement or transaction will result from the Microsemi proposal or PMC's discussions with Microsemi.

PMC's board continues to recommend the amended and restated merger agreement with Skyworks to its stockholders. The board says that is not modifying or withdrawing its recommendation with respect to the agreement with Skyworks, and is not making any recommendation with respect to the Microsemi proposal.

"Our revised proposal offers superior value to PMC's shareholders, and Microsemi is uniquely positioned to realize significant synergies," believes Microsemi's chairman & CEO James J. Peterson. "Our offer is more strategic, offers more certainty in terms of closing approval process and timing, and at a higher price than the Skyworks proposal," he adds. "Shareholders receive cash now as well as the opportunity to participate in the significant upside potential of a global analog and mixed-signal leader with a highly diversified platform for growth and profitability."

Microsemi expects that the transaction would be immediately accretive to its non-GAAP EPS and free cash flow. The firm anticipates achieving more than $100m in annual cost synergies (including more than $75m in the first full quarter of combined operations). Microsemi estimates approximately $0.60 of non-GAAP EPS accretion in the first full year after closing the transaction.

See related items:

Skyworks increases offer to acquire PMC-Sierra from $10.50 to $11.60 per share

Skyworks to acquire PMC-Sierra for $2bn

Skyworks' quarterly revenue rises a more-than-expected 38% year-on-year to $810m

Tags: Microsemi Skyworks

Visit: www.pmcs.com

Visit: www.microsemi.com

Visit: www.skyworksinc.com

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