Key Transaction Highlights:
- Acquisition of analog mixed-signal
company adds complementary product lines, supporting Renesas’
growth strategy
- IDT’s analog mixed-signal products
including sensors, high performance interconnect, RF & optical
and wireless power join Renesas’ MCUs, SoCs and power management
ICs to deliver comprehensive solutions addressing the increasing
demand from IoT to big data processing
- IDT’s products for memory interconnect
and specialized power management enable Renesas to create growth in
expanding data economy fields and to further strengthen its
presence in the industrial and automotive segments
- US$49.00 per share in cash to be paid
for all IDT outstanding shares, representing a premium of
approximately 29.5 percent over the unaffected price of IDT’s
common stock as of August 30, 2018
- The transaction is expected to be
highly accretive to Renesas’ pro-forma non-GAAP gross margin,
non-GAAP EPS (earnings per share) and free cash flows immediately
after closing
- Renesas plans to finance the
transaction with cash reserves and approximately 679.0 billion yen
of bank loans. There will be no issuance of additional share
capital for this transaction.
Renesas Electronics Corporation (“Renesas”, TSE: 6723), a
premier supplier of advanced semiconductor solutions, and
Integrated Device Technology, Inc. (“IDT”, NASDAQ: IDTI), a leading
supplier of analog mixed-signal products including sensors,
connectivity and wireless power, today announced they have signed a
definitive agreement under which Renesas will acquire IDT for
US$49.00 per share in an all-cash transaction representing an
equity value of approximately US$6.7 billion (approximately 733.0
billion yen at an exchange rate of 110 yen to the dollar). The
acquisition combines two recognized leaders in embedded processors
and analog mixed-signal semiconductors, each with unique strengths
in delivering products to improve performance and efficiency in
high-computing electronic systems. The boards of directors of both
companies have unanimously approved the transaction. Closing of the
transaction is expected to occur in the first half of 2019,
following approvals by IDT shareholders and the relevant regulatory
authorities.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20180910005943/en/
Since 2016, Renesas has been executing its growth strategy to
thrive in the global marketplace and become a global leading
embedded solution provider. As part of this initiative, Renesas is
working to expand its analog solution lineup and to strengthen its
kit solution offerings that combine its microcontrollers (MCUs),
system-on-chips (SoCs) and analog products. These efforts will be
underpinned by revenue growth in its focus domains: automotive
segment, which is expected to see tremendous growth with autonomous
driving and EV/HEV; industrial and infrastructure segments, which
are expected to advance with Industry 4.0 and 5G (fifth-generation)
wireless communications, as well as the fast-growing IoT segment.
Renesas views accretive acquisitions as key enablers in achieving
this growth strategy to deliver further incremental growth. The
completion of the Intersil Corporation acquisition in February 2017
enabled Renesas to add industry-leading power management and
precision analog capabilities to its product portfolio. Renesas is
capitalizing on the exciting opportunities in its focus business
segments by offering combined solutions. The transaction announced
today further accelerates Renesas’ growth strategy, bringing
substantial strategic and financial benefits.
- Complementary products expand
Renesas’ solution offerings
The acquisition will provide Renesas with access to a vast array
of robust analog mixed-signal capabilities in embedded systems,
including RF, advanced timing, memory interface & power
management, optical interconnect, wireless power, and smart
sensors. The combination of these product lines with Renesas’
advanced MCUs and SoCs and power management ICs enables Renesas to
offer comprehensive solutions that support the increasing demand of
high data processing performance. The enriched solution offerings
will bring optimal systems from external sensors through analog
front-end to processors and interfaces.
- Expands business growth
opportunities
IDT’s analog mixed-signal products for data sensing, storage and
interconnect are key devices that support the growth of data
economy. Acquisition of these products enables Renesas to extend
its reach to fast-growing data economy-related applications
including data center and communication infrastructure, and to
strengthen its presence in the industrial and automotive
segments.
- Acceleration of global management
and operations
The Intersil acquisition brought diverse talent and management
capabilities to accelerate Renesas’ global operations. The
transaction announced today extends this effort and will provide
Renesas with further proficiency to execute global strategy.
- Substantial financial
benefits
Renesas anticipates near- and long-term revenue growth from
expanded opportunities and access to fast-growing industries, and
cost savings from a greater scale business platform to bring
innovation and improvements with an expected financial impact of
approximately over US$250 million (non-GAAP operating income per
year on a run rate basis). The transaction is expected to be
accretive to Renesas’ non-GAAP gross margin and non-GAAP earnings
per share by approximately 1.6%pts and 18% (Note), respectively,
immediately after closing.
"This acquisition will bring us complementary, market-leading
analog mixed-signal assets and an incredibly talented group of
professionals to help us boost our embedded solution capabilities,"
said Bunsei Kure, Representative Director, President and CEO of
Renesas. “IDT’s products combined with our MCUs, SoCs and power
management ICs will enable Renesas to widen its product offerings
as well as to expand its reach into areas such as the growing data
economy-related space.”
“The combination of Integrated Device Technology’s analog
mixed-signal leadership with Renesas’ world-leading microcontroller
and automotive/industrial franchise creates a new global
powerhouse,” said Gregory L. Waters, President and CEO of IDT. “The
Combined company will possess the key capabilities that customers
in the modern data economy demand.”
IDT shares are to be acquired at a price of US$49.00 per share,
for a total equity value of approximately US$6.7 billion
(approximately ¥733.0 billion at an exchange rate of 110 yen to the
dollar). Renesas plans to finance the transaction with cash
reserves and approximately 679.0 billion yen of bank loans. Renesas
does not intend to raise equity financing for this transaction.
Morgan Stanley, BofA Merrill Lynch and Mizuho Securities acted
as financial advisors to Renesas; Morrison & Foerster LLP, and
Covington & Burling LLP and Nagashima Ohno & Tsunematsu
acted as Renesas’ legal counsel. J.P. Morgan acted as exclusive
financial advisor to IDT; Latham & Watkins LLP acted as IDT’s
legal counsel.
(Note) Simple sum of Renesas FY17/12 actual and IDT FY18/3
actual, non-GAAP basis
About Renesas Electronics Corporation
Renesas Electronics Corporation (TSE: 6723) delivers trusted
embedded design innovation with complete semiconductor solutions
that enable billions of connected, intelligent devices to enhance
the way people work and live—securely and safely. A global leader
in microcontrollers, analog, power and SoC products and integrated
platforms, Renesas provides the expertise, quality, and
comprehensive solutions for a broad range of Automotive,
Industrial, Home Electronics (HE), Office Automation (OA) and
Information Communication Technology (ICT) applications to help
shape a limitless future. Learn more at renesas.com.
About IDT
Integrated Device Technology, Inc. develops system-level
solutions that optimize its customers’ applications. IDT’s
market-leading products in RF, high performance timing, memory
interface, real-time interconnect, optical interconnect, wireless
power and smart sensors are among the company’s broad array of
complete mixed-signal solutions for the communications, computing,
consumer, automotive and industrial segments. Headquartered in San
Jose, Calif., IDT has design, manufacturing, sales facilities and
distribution partners throughout the world. IDT stock is traded on
the NASDAQ Global Select Stock Market® under the symbol “IDTI.”
Additional information about IDT can be found at www.IDT.com.
Follow IDT on Facebook, LinkedIn, Twitter, and YouTube.
Additional Information and Where to Find It
This communication is being made in respect of the proposed
transaction involving IDT and Renesas. In connection with the
proposed transaction, IDT plans to file with the Securities and
Exchange Commission (“SEC”) and mail
or otherwise provide to its stockholders a proxy statement
regarding the proposed transaction. IDT may also file other
documents with the SEC regarding the proposed transaction. This
communication is not a substitute for the proxy statement or any
other document that may be filed by IDT with the SEC. BEFORE
MAKING ANY VOTING DECISION, IDT’S STOCKHOLDERS ARE URGED TO READ
THE PROXY STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND
ANY OTHER DOCUMENTS FILED BY IDT WITH THE SEC IN CONNECTION WITH
THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE THEREIN
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE
PROPOSED TRANSACTION BECAUSE THEY CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED
TRANSACTION. Investors and stockholders may obtain a free copy
of the proxy statement and other documents IDT files with the SEC
(when available) through the website maintained by the SEC at
www.sec.gov. IDT makes available free of charge at www.idt.com (in
the “Investors” section), copies of materials it files with, or
furnishes to, the SEC.
Participants in the Solicitation
IDT and its directors, executive officers and certain employees
and other persons may be deemed to be participants in the
solicitation of proxies from IDT’s stockholders in connection with
the proposed transaction. Security holders may obtain information
regarding the names, affiliations and interests of IDT’s directors
and executive officers in IDT’s Annual Report on Form 10-K for the
fiscal year ended April 1, 2018, which was filed with the SEC on
May 18, 2018, and its definitive proxy statement for the 2018
annual meeting of stockholders, which was filed with the SEC on
July 30, 2018. Additional information regarding the interests of
such individuals in the proposed transaction will be included in
the proxy statement relating to the proposed transaction when it is
filed with the SEC. These documents (when available) may be
obtained free of charge from the SEC’s website at www.sec.gov and
IDT’s website at www.idt.com
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains certain information which may
constitute forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future
events that are based on current expectations, estimates, forecasts
and projections. These statements are subject to risks and
uncertainties that could cause actual performance or results to
differ materially from those expressed in or suggested by the
forward-looking statements. All statements other than statements of
historical fact or relating to present facts or current conditions
included in this communication are forward-looking statements. Such
forward-looking statements include, among others, IDT’s current
expectations and projections relating to its financial condition,
results of operations, plans, objectives, future performance and
business. Forward-looking statements can usually be identified by
the use of terminology such as “anticipate,” “believe,” “could,”
“continue,” “estimate,” “expect,” “goals,” “intend,” “likely,”
“may,” “might,” “plan,” “project,” “seek,” “should,” “target,”
“will,” “would,” and variations of such words and similar
expressions.
Those risks, uncertainties and assumptions include, (i) the risk
that the proposed transaction may not be completed in a timely
manner or at all, which may adversely affect IDT’s business and the
price of the common stock of IDT, (ii) the failure to satisfy any
of the conditions to the consummation of the proposed transaction,
including the adoption of the merger agreement by the stockholders
of IDT and the receipt of certain governmental and regulatory
approvals, (iii) the occurrence of any event, change or other
circumstance that could give rise to the termination of the merger
agreement, (iv) the effect of the announcement or pendency of the
proposed transaction on IDT’s business relationships, operating
results and business generally, (v) risks that the proposed
transaction disrupts current plans and operations and the potential
difficulties in employee retention as a result of the proposed
transaction, (vi) risks related to diverting management’s attention
from IDT’s ongoing business operations (vii) the outcome of any
legal proceedings that may be instituted against us related to the
merger agreement or the proposed transaction; (viii) unexpected
costs, charges or expenses resulting from the proposed transaction;
and (ix) other risks described in IDT’s filings with the SEC, such
as its Quarterly Reports on Form 10-Q and Annual Reports on Form
10-K.
Any forward-looking statement made in this communication speaks
only as of the date on which it is made. You should not put undue
reliance on any forward-looking statements. IDT undertakes no
obligation, and expressly disclaims any obligation, to update,
alter or otherwise revise any forward-looking statement, whether
written or oral, that may be made from time to time, whether as a
result of new information, future developments or otherwise, except
as may be required by law. If we do update one or more
forward-looking statements, no inference should be drawn that we
will make additional updates with respect to those or other
forward-looking statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180910005943/en/
Media ContactsRenesas Electronics CorporationKyoko
Okamoto, +81 3-6773-3001pr@renesas.comorIntegrated Device
Technology, Inc.Krista Pavlakos, 408-574-6640Director, Demand
Creation & CommunicationsKrista.Pavlakos@idt.comorInvestor
ContactsRenesas Electronics CorporationMakie Uehara, +81
3-6773-3002ir@renesas.comorIntegrated Device Technology,
Inc.Krishna Shankar, 408-284-6515Head of Investor
Relationsir@idt.com