Microchip to Acquire Micrel for $744 Million

Microchip Technology, which supplies microcontroller, mixed-signal, analog and Flash-IP solutions, agreed to acquire Micrel for $14.00 per share, representing a total equity value of about $839 million, and a total enterprise value of about $744 million.

Micrel, which is based in San Jose, California, is a leading manufacturer of IC solutions for the worldwide high-performance analog and high-speed mixed signal, LAN and timing and communications solutions markets. Its products include high performance analog, power, advanced mixed-signal and radio frequency semiconductors; high speed communication, clock management, and LAN solutions including Ethernet switch and physical layer transceiver integrated circuits. These products address a wide range of rapidly growing end markets including cellular handsets, portable and enterprise computing, enterprise and home networking, wide area and metropolitan area networks and industrial equipment. Micrel was founded in 1978 and has been profitable in 33 of its 34 years of its existence. The Company has consistently generated positive cash flows since going public in 1994.

"We are pleased to have Micrel become part of the Microchip team. Micrel's portfolio of Linear and Power Management products, LAN solutions and Timing and Communications products, as well as their strong position in the Industrial, Automotive and Communications markets, complement many of Microchip's initiatives in these areas.  We believe that combining Micrel's business with Microchip's business will enable significant synergies and cross selling opportunities," said Steve Sanghi, President and CEO of Microchip Technology.  "Ray Zinn founded Micrel and has led the company for the last 37 years.  I want to thank Ray for his vision in guiding Micrel from a start-up to almost a quarter billion dollars in annual sales," added Mr. Sanghi.

"We are excited to join Microchip Technology, a premier company in the semiconductor industry. Microchip has demonstrated consistent profitability, technology leadership and growth in its core businesses.  We believe that this acquisition provides the best vehicle for us to realize significant value for Micrel's shareholders and is a fantastic outcome for our employees and customers, as well as the opportunity to scale up to the much stronger sales and manufacturing platforms of Microchip," said Ray Zinn, President and CEO of Micrel.

http://www.microchip.com/