Texas Instruments To Acquire National Semiconductor For $25/Share, 80% Premium
Yet another notable deal, with an 80% premium, to be funded by cash and debt. Mostly debt. Very cheap debt.
DALLAS and SANTA CLARA, Calif., April 4, 2011 /PRNewswire/ -- Texas Instruments Incorporated (TI) (NYSE:TXN - News) and National Semiconductor (NYSE:NSM - News) today announced they have signed a definitive agreement under which TI will acquire National for $25 per share in an all-cash transaction of about $6.5 billion.
The acquisition combines two industry leaders in analog
semiconductors, each with unique strengths in delivering products to
improve performance and efficiency and convert real-world signals in
electronic systems. The boards of directors of both companies have
unanimously approved the transaction.
"This acquisition is about strength and growth," said Rich Templeton,
TI's chairman, president and chief executive officer. "National has an
excellent development team, and its products combined with our own can
offer customers an analog portfolio of unmatched depth and breadth. In
recent years, National's management team has done an outstanding job of
improving margins and streamlining expenses, which upon close will
increase TI's profitability and earnings per share, excluding
transaction costs. Our ability to accelerate National's growth with our
much larger sales force is the foundation of our belief that we can
produce strong returns on our investment. The combined sales team will
be 10 times larger than National's is today, and the portfolio will be
exposed to more customers in more markets."
"Our two companies complement each other very well," said Don Macleod,
National's chief executive officer. "TI has much greater scale in the
marketplace, with its larger portfolio of products and its large global
sales force. This provides a platform to enhance National's strong and
highly profitable analog capability, power management in particular,
leading to meaningful growth."
Each company has unique strengths.
Among them are the breadth of TI's 30,000 analog products, extensive
customer reach, and industry-leading manufacturing including the world's
first 300-millimeter analog factory. National brings a portfolio of
12,000 analog products, a strong position with customers in the
industrial power market, and excellent customer design tools. Upon
close of the transaction, National becomes part of TI's analog segment,
and sales of analog semiconductors will represent almost 50 percent of
The combined company also will benefit from National's manufacturing operations, located in Maine, Scotland and Malaysia,
which TI will continue to operate. Each site has additional capacity
to increase production. National's headquarters will remain in Santa Clara, California.
Under terms of the agreement, National stockholders will receive $25
in cash for each share of National common stock they hold at the time
of closing. TI expects to fund the transaction with a combination of
existing cash balances and debt. The acquisition is subject to
customary closing conditions, including review by U.S. and international
regulators and approval by National's shareholders. The transaction is
expected to close in six to nine months.
The market for analog semiconductors was $42 billion in 2010. TI is the market leader with 2010 analog revenue of $6.0 billion, or 14 percent of the market. National's revenue in calendar year 2010 was about $1.6 billion, or 3 percent of the market.
Today at 5:30 p.m. EDT / 4:30 p.m. CDT / 2:30 p.m. PDT,
TI and National will hold a live audio webcast for financial analysts
and stockholders to discuss the agreement to acquire National.
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