Chip maker Cypress Semiconductor Corp. (CY) has agreed to acquire smaller rival Ramtron International Corp. (RMTR) in a deal valued at about $109.8 million, the two companies said Wednesday. Shares of Ramtron are gaining more than 7 percent in the pre-market following the announcement.
The deal value excludes assumed debt and options and includes shares previously acquired by Cypress.
Under the deal, Cypress will acquire all the outstanding stock of Ramtron for $3.10 per share in cash. The offer price represents a 71 percent premium to Ramtron's closing stock price of $1.81 per share on June 11, 2012, the day before Cypress publicly disclosed its offer for Ramtron.
This is San Jose, California-based Cypress' second takeover bid for Colorado-based Ramtron, having earlier offered to buy the company in March 2011 for $3.01 per share. However, Ramtron had rejected that offer.
Cypress then went ahead with a hostile $2.48 per share takeover bid for Ramtron in June 2012, but that offer as well as a sweetened offer of $2.68 per share in August were both spurned by Ramtron.
The acquisition of Ramtron is expected to enable Cypress, which makes microcontrollers and chips used in touchscreen phones as well as tablets, to gain access to Ramtron's ferroelectric random-access memory or F-RAM technology.
The boards of directors of both Cypress and Ramtron have approved the transaction. Ramtron's board of directors has unanimously recommended that Ramtron stockholders tender their shares in Cypress's increased tender offer.
Consistent with the requirements of the merger deal between the two companies, Cypress said it will promptly amend its pending tender offer to increase the offer price to $3.10 and also extend the expiration of the offer.
Rodgers, President and Chief Executive Officer of Cypress said, "The combination of Ramtron's FRAM technology with Cypress's nvSRAM business, considerable R&D resources, historically strong manufacturing capabilities, global sales organization, and deep extension into distribution channels will create a significant new entity in the nonvolatile memory business."
In Wednesday's regular session, CY is trading at $12.47, down $0.11 or 0.87 percent on a volume of 277,084 shares.
RMTR is trading at $3.08, up $0.21 or 7.32 percent on a volume of 633,401 shares.
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