RF Micro Devices announced Monday the company will buy peer TriQuint Semiconductor Inc for about $1.6 billion in an all-stock deal to create a company that could better compete in selling chips to mobile-handset makers.
“The merger will create new growth opportunities in three large global markets – mobile devices, network infrastructure and aerospace/defense – with scale advantages, innovative new products and a greatly improved operating model. RFMD and TriQuint together will offer the industry’s broadest portfolio of critical enabling technologies to develop and commercialize tightly integrated solutions at record speeds,” RF Micro said in a news release.
“The combination will foster a new wave of exciting mobile devices that are broadly accessible and offer dramatically higher data throughput, to the benefit of carriers and consumers alike.”
TriQuint’s shares jumped 29 percent in premarket trading. RF Micro’s stock rose 17 percent before the opening bell.
TriQuint shareholders will receive 1.675 shares of NewCo and RFMD shareholders will receive 1 share of NewCo for each TriQuintor RFMD share held. At the closing of the transaction, the companies will execute a one-for-four reverse stock split resulting in approximately 145 million shares outstanding.
Former shareholders of RFMD and TriQuint will each own approximately 50 percent of the new company post-merger. The transaction represents an implied price of $9.73 for each TriQuint share, representing a 5.4% premium based on the closing price of $9.23 for TriQuint on February 21, 2014.
“The world’s demand for mobile data is growing exponentially,” said RFMD CEO and President Bob Bruggeworth. ”
“I believe this is an industry shaping event,” said TriQuint CEO Ralph Quinsey. “Through this combination of RFMD and TriQuint we form a diversified market leader with a highly compatible combination of products and technologies and a world class team focused on innovation and superior financial results. The alignment of culture between the two companies and the well matched products, capabilities and technologies will create compelling new opportunities.”