Montage Technology Group Limited Proposes to Acquire Pericom for $18.50 Per Share
By Business Wire News
Montage Technology Group Limited (“Montage Technology”), a global fabless provider of analog and mixed-signal semiconductor solutions addressing the home entertainment and cloud computing markets, today announced that it proposed an offer to acquire 100% of the outstanding stock of Pericom Semiconductor Corporation (“Pericom”) (Nasdaq: PSEM) at a price of $18.50 per share in cash to Pericom shareholders, in a transaction valued at approximately $430 million. This transaction would provide Pericom shareholders with a substantially superior valuation to the $17.00 per share offer announced by Diodes Incorporated (“Diodes”) on September 3, 2015, and clearly constitutes a “Superior Proposal” under Pericom’s merger agreement with Diodes.
Montage Technology’s offer of $18.50 per share in cash represents a highly attractive premium of approximately 52% to the unaffected closing price on September 2, 2015 and a premium of approximately 9% to Diodes’ offer.
The proposal was conveyed in a binding offer letter to Pericom’s Board of Directors on September 29, 2015, together with signed copies of a merger agreement and a voting agreement, each on substantially the same terms as the Diodes merger agreement and voting agreement, and a signed copy of an escrow agreement relating to a reverse break-up fee.
Montage Technology has received signed commitment letters from the Bank of China and from China Electronics Corporation, one of the largest electronics companies in China and a principal shareholder of Montage (“CEC”), that would provide the necessary financing for the transaction. CEC was the principal source of the financing in Shanghai Pudong Science and Technology Investment Co. Ltd.’s acquisition of Montage Technology last year, which was a significantly larger transaction that the contemplated acquisition of Pericom by Montage Technology.
Montage Technology is further offering to provide Pericom with a reverse break-up fee in an amount equal to 5% of the transaction equity value if the deal does not close within 5 business days of all conditions being met. Montage Technology will escrow the amount of that reverse break-up fee in a bank account located in the United States with a United States commercial bank.
Similar to the proposed transaction with Diodes, the Montage Technology transaction is subject to applicable regulatory approvals, but Montage Technology does not anticipate any issues with obtaining any regulatory approvals, including from any applicable People’s Republic of China, United States or Taiwan regulatory authorities, or consummating the deal on a timely basis.
- However, to eliminate any potential concern regarding obtaining any government regulatory clearance, Montage Technology will agree to a so-called “hell or high water” obligation to obtain any required government regulatory clearance.
- Montage Technology will also pay to Pericom the reverse break-up fee (5% of the transaction equity value) if the transaction does not close as a result of a required regulatory approval failure.
Furthermore, in addition to the substantial premium to Pericom shareholders, Montage Technology is willing to pay to Diodes at the signing of a transaction with Pericom, on behalf of Pericom, the Diodes break-up fee of $15 million.
Montage Technology urges Pericom shareholders to contact Pericom to make clear that the Pericom Board of Directors should endorse the $18.50 per share in cash proposal by Montage Technology which is clearly superior to the Diodes merger agreement.
Barclays is serving as financial advisor to, and O’Melveny & Myers LLP is serving as legal counsel to, Montage Technology.
About Montage Technology
Montage Technology is a global fabless provider of analog and mixed-signal semiconductor solutions currently addressing the home entertainment and cloud computing markets. In the home entertainment market, Montage Technology’s technology platform enables the Company to design highly integrated end-to-end solutions with customized software for set-top boxes. These solutions optimize signal processing performance under demanding operating conditions typically found in emerging marketing environments. In the cloud computing market, Montage Technology offers high performance, low power memory interface solutions that enable memory intensive server applications. Its technology platform approach allows Montage Technology to provide integrated solutions that meet the expanding needs of customers through continuous innovation, efficient design and rapid product development. For more information regarding Montage Technology please visit the Company’s website at www.montage-tech.com.
Forward Looking Statements
This press release contains “forward-looking” statements about Montage Technology’s plans, expectations and beliefs. Forward-looking statements can be identified by terminology such as “will”, “should”, “expects”, “anticipates”, “future”, “intends”, “plans”, “projects”, “predicts”, “believes”, “estimates”, “forecasts”, “may” and similar statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may differ materially from actual results due to a variety of factors. Montage Technology undertakes no obligation to update these statements as a result of new information or future events, except as may be required by law.
Mark Voll, 408-982-2780 or 86-21-6128-5678 x8618