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Microchip Technology to acquire Atmel in $3.56 billion deal

Staff writer |
Microchip Technology Incorporated has signed a definitive agreement to acquire Atmel Corporation for $8.15 per share in a combination of cash and Microchip common stock.

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The acquisition price represents a total equity value of about $3.56 billion, and a total enterprise value of about $3.40 billion, after excluding Atmel's cash and investments net of debt on its balance sheet of approximately $155 million at December 31, 2015.

Concurrent with this announcement, Microchip announced that its Board of Directors has authorized an increase in the existing share repurchase program to 15.0 million shares of common stock from the approximately 11.4 million shares remaining under the prior authorization.

Under this program, in the next several months, Microchip intends to repurchase the approximate number of shares it issues in the Atmel acquisition, which is expected to result in the transaction having the accretive effects of a cash transaction from a financial perspective.

Following the closing, the transaction is expected to be immediately accretive to Microchip's non-GAAP earnings per share. Based on currently available information, Microchip anticipates achieving an estimated $170 million in synergies from cost savings and incremental revenue growth in fiscal year 2019 that begins on April 1, 2018.

The transaction has been approved by the boards of each company and is expected to close in the second quarter of calendar year 2016, subject to approval by Atmel's stockholders, regulatory approvals and other customary closing conditions.

No approval by Microchip's stockholders is required in connection with the transaction. The transaction is not subject to any financing conditions.

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