RF Micro Devices (Nasdaq: RFMD) agreed to buy TriQuint Semiconductor Inc. for $1.59 billion, creating a chipmaker with more than $2 billion in revenue that would capitalize on rising demand for mobile devices.
RF Micro is a partner in the recently announced Department of Energy semiconductor research project at NCSU.
The transaction, billed as a merger of equals, represents an implied price of $9.73 for each TriQuint share, a 5.4 percent premium over last week’s closing price, the companies said in a statement today. Former shareholders of RF Micro and Hillsboro, Oregon-based TriQuint will each own about 50 percent of the post-merger company, which will have a new name.
RF Micro and TriQuint, which specialize in radio-frequency technology, are seeking to benefit from a projected increase in purchases of mobile devices and wireless data. The companies expect to reduce costs by at least $150 million — $75 million in the first year after closing and the rest the second year.
RF Micro Chief Executive Officer Bob Bruggeworth will serve as CEO, while TriQuint CEO Ralph Quinsey will become non- executive chairman. The new company will have five directors apiece from the TriQuint and RF Micro boards.
“The world’s demand for mobile data is growing exponentially,” Bruggeworth said in the deal announcement. “The combination of TriQuint and RFMD creates a new leader in RF solutions with expertise in mobile devices and complex infrastructure and global defense applications. With this merger of equals, we will bring under one roof all of the critical RF building blocks necessary to innovate at the heart of what makes mobile mobile – the crucial back-and-forth data flow between the mobile device and the network. We will harness this innovation for the benefit of all our customers – from mobile to infrastructure to defense.”
After the transaction closes, the companies plan a one-for- four reverse stock split, resulting in about 145 million shares outstanding.
Shares of Greensboro, North Carolina-based RF Micro rose to as high as $7.38 in early trading. They had closed at $5.81 on Feb. 21. Shares of TriQuint, which had closed at $9.23, increased to as high as $12.17.
“I believe this is an industry shaping event,” said TriQuint’s Quinsey. “Through this combination of RFMD and TriQuint we form a diversified market leader with a highly compatible combination of products and technologies and a world class team focused on innovation and superior financial results. The alignment of culture between the two companies and the well matched products, capabilities and technologies will create compelling new opportunities.”
