Exar Corp. (EXAR) said Sunday that it has agreed to buy Integrated Memory Logic Limited, a Taiwan-based provider of analog mixed-signal solutions for the flat panel display market.
Exar, a Fremont, California-based provider of analog mixed-signal, video and data management solutions, noted that the acquisition of iML will support its strategy of building a large scale, diversified analog mixed-signal business.
Under the terms of the deal, Exar's wholly-owned subsidiary will commence a tender offer to acquire all of the outstanding shares of iML for NT$91.00, or about $3.00, per share in cash. Exar will acquire any remaining shares at NT$91.00 per share pursuant to a follow-on merger.
The gross transaction is valued at NT$6.8 billion, or about $223 million. Net of cash acquired, the transaction is valued at NT$3.1 billion, or about $94 million.
The tender offer is scheduled to expire in Taipei, Taiwan, on Thursday, May 29, 2014, and the transaction is expected to close in the second quarter of fiscal 2015. Under a deal, certain shareholders holding about 32 percent of the outstanding shares of iML have committed to tender all shares owned by them into the tender offer.
After the closing of the deal, iML will become a wholly-owned subsidiary of Exar and its stock will cease trading on the Taiwan Stock Exchange. On completion, Exar anticipates the transaction to be immediately accretive to its pro-forma earnings per share.
Louis DiNardo, President and CEO of Exar said, "iML is a leading provider of power management and color calibration solutions for large and medium-sized flat panel displays in the LED television market as well as high-resolution tablets. The company serves customers in Korea, Taiwan, Japan and China, which will enhance Exar's existing presence in these markets."
Stifel acted as exclusive financial advisor to Exar, while O'Melveny & Myers LLP and Lee & Li, attorneys-at-law, acted as its legal counsel. For iML, RBC Capital Markets LLC acted as exclusive financial advisor, while Morrison & Foerster LLP, LCS & Partners and Maples and Calder acted as legal counsel.
EXAR closed Friday's trading at $10.90, down $0.29 or 2.59 percent on a volume of 193,207 shares.
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