Integrated Device Technology, Inc. (IDTI) has agreed to acquire PLX Technology Inc. (PLXT) for $7.00 per share in cash and stock in a transaction of about $330 million, the two semiconductor companies said Monday. Shares of PLX gained more than 65 percent in after-hours trading following the news, while IDT shares declined more than 6 percent.
IDT noted that the acquisition will broaden its solutions for data center interconnects in cloud computing.
Under the terms of the deal approved by the boards of directors of both companies, IDT will acquire all of the outstanding shares of PLX common stock pursuant to an exchange offer. This will be followed by a second step merger.
PLX stockholders will receive $3.50 in cash and 0.525 shares of IDT common stock for each PLX common share outstanding. The companies expect the proposed transaction to close as early as IDT's first fiscal quarter 2013, which is the second quarter of calendar 2012.
The offer price of $7.00 per share represents a 76 percent premium to PLX's closing stock price on Monday.
Ted Tewksbury, president and CEO of IDT said, "The proposed acquisition of PLX Technology represents an exciting expansion of IDT's core serial switching and interface business."
Following the acquisition, IDT expects to achieve total run-rate cost synergies of more than $35 million, excluding transaction related charges, by fiscal year 2014.
San Jose, California-based IDT currently projects the transaction to be accretive to adjusted earnings by the third fiscal quarter of 2013 with more significant accretion by fiscal year 2014. This is based on the assumed closing of the transaction in the first fiscal quarter of 2013.
Sunnyvale, California-based PLX can solicit superior offers from third parties for a "go shop" period of 30 calendar days continuing through May 30, 2012. The deal also provides for certain break-up fees payable to IDT in connection with the termination of the agreement in certain circumstances.
Separately, IDT reported fourth-quarter net income of $12.75 million or $0.09 per share, down from $30.87 million or $0.20 per share in the prior-year period.
Adjusted net income from continuing operations dropped to $7.11 million or $0.05 per share from $28.36 million or $0.19 per share in the same period last year. Revenue declined 18 percent to $119.12 million from $144.67 million in the year-ago period.
On average, analysts polled by Thomson Reuters expected the company to earn $0.03 per share for the quarter on revenues of $117.31 million. Analysts estimates typically exclude special items.
Meanwhile, PLX's first-quarter net loss narrowed to $7.44 million or $0.17 per share from $9.13 million or $0.21 per share in the year-ago period.
However, adjusted loss per share widened to $0.12 from $0.09 in the prior-year quarter. Net revenues decreased 9.5 percent to $25.42 million from $28.08 million in the year-ago period.
Analysts expected loss of $0.06 per share on revenues of $26.84 million.
IDTI closed Monday's trading at $6.78. In after-hours trading, the stock declined $0.47 or 6.86 percent to $6.31.
PLXT closed the regular session at $3.98. But the stock gained $2.61 or 65.58 percent to $6.59 in after-hours.
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