Golden Gate Capital said Thursday that it has agreed to buy Conexant Systems for $2.40 a share cash, or roughly $300 million. The deal, subject to shareholder approval and other closing conditions, is expected to close in second quarter. Golden Gate outbid Standard Microsystems, which had offered to buy Conexant for $2.25 a share, or $284 million.
Gold Holdings, Inc., an affiliate of Golden Gate Capital, today announced the signing of a definitive merger agreement with Conexant Systems, Inc. (NASDAQ: CNXT), a leading supplier of innovative semiconductor solutions for imaging, audio, embedded modem, and video surveillance applications.
Gold Holdings, Inc. has agreed to purchase all of the outstanding shares of Conexant common stock at a price of $2.40 per share in cash. The transaction is expected to close in the second quarter of calendar 2011 subject to the satisfaction of regulatory requirements, approval by Conexant stockholders and other customary closing conditions.
Upon completion of the transaction, Conexant will become Golden Gate Capital’s fifth semiconductor investment. Prior investments in the sector include Lantiq (broadband semiconductor devices), Aeroflex (aerospace and communications semiconductor devices, NYSE: ARX), Teridian (smart-meter semiconductor devices, recently acquired by Maxim Integrated Products), and Vistec Semiconductor Systems (direct-write electron beam lithography tools).
“We are excited to have the opportunity to invest in a fabless semiconductor business with such a strong track-record of innovation and analog and mixed-signal design capabilities,” said John Knoll, Managing Director of Golden Gate Capital. “Conexant’s blue-chip customer base and strong IP portfolio provide an excellent foundation for long-term growth and continued market-leadership. We look forward to working with management to continue developing innovative new products that better serve customer needs.”
Dan Artusi, an operating executive with Golden Gate Capital who focuses on semiconductor investments and serves as a director of Lantiq, will join the board of directors of Conexant upon the closing of the transaction. Prior to joining Golden Gate Capital in 2009, Mr. Artusi served as the CEO of several semiconductor companies including Conexant (2007-2008), Silicon Laboratories (2001-2005) and Coldwatt (2005-2007).
“We are delighted to be working with Dan Artusi as an advisor on this investment,” said David Dominik, co-founder and Chief Investment Officer of Golden Gate Capital. “Dan provides an extensive breadth of knowledge in the relevant technologies and end markets served by the company. We believe his contributions will help us add significant value to Conexant.”
Golden Gate Capital manages more than $9 billion in capital and has completed over 13 going-private transactions in the technology sector since its inception in 2000. The firm is based in San Francisco, Calif.
Earlier this week, Golden Gate Capital also announced that it has entered into a definitive agreement to acquire Tollgrade (NASDAQ: TLGD) in an all-cash transaction valued at approximately $137 million. Tollgrade is a leading provider of network service assurance solutions for telecommunications operators in the United States and Europe.
About Golden Gate Capital
Golden Gate Capital is a San Francisco-based private investment firm with approximately $9 billion of capital under its management. The firm’s charter is to partner with world-class management teams to make equity investments in situations where there is a demonstrable opportunity to significantly enhance a company’s value. The principals of Golden Gate have a long and successful history of investing with management partners across a wide range of industries and transaction types, including going-privates, corporate divestitures, leveraged buyouts and recapitalizations. For additional information, visit www.goldengatecap.com.
Conexant’s portfolio of innovative semiconductor solutions includes products for imaging, audio, embedded modem, and video surveillance applications. Conexant is a fabless semiconductor company headquartered in Newport Beach, Calif. To learn more, please visit www.conexant.com.
Additional Information About the Transaction
Conexant will file a proxy statement and other relevant documents concerning the proposed merger transaction with Gold Holdings, Inc. (the “Transaction”) with the Securities and Exchange Commission (the “SEC”). The definitive proxy statement will be mailed to stockholders of Conexant. Investors and stockholders of Conexant are urged to read the proxy statement and any other relevant documents when they become available because they will contain important information about the Transaction. You may obtain a free copy of the proxy statement (when available) and other related documents filed by Conexant with the SEC at the SEC’s website at www.sec.gov or by accessing Conexant’s website at www.conexant.com and clicking on the “Investors” link and then clicking on the link for “Financial Information” and then clicking on the link for “SEC Filings”.
Participants in the Transaction
Conexant and its directors and officers may be deemed to be participants in the solicitation of proxies from Conexant’s stockholders in respect of the Transaction. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of Conexant’s stockholders in connection with the Transaction, including the interests of such participants in the Transaction, will be set forth in the proxy statement when it is filed with the SEC. You can find information about Conexant’s executive officers and directors in Conexant’s definitive proxy statement filed with the SEC on December 10, 2010. You can obtain free copies of these documents from Conexant using the contact information above.
Except for historical information contained herein, the matters set forth in this document are forward-looking statements about expected future events and financial and operating results that involve risks and uncertainties. These uncertainties may cause Conexant’s actual future results to be materially different from those discussed in the forward-looking statements. These risks and uncertainties include risks relating to the ability to obtain regulatory approvals of the Transaction on the proposed terms and schedule; the failure of Conexant stockholders to approve the Transaction; a failure to consummate or delay in consummating the Transaction for other reasons; disruption from the Transaction making it more difficult to maintain relationships with customers, employees or suppliers; competition and its effect on pricing, spending, third-party relationships and revenues; and other risks relating to Conexant’s business set forth in its filings with the SEC.
Our forward looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. All forward-looking statements speak only as of the date hereof and are based upon the information available to Conexant at this time. Such statements are subject to change, and Conexant does not undertake to update such statements, except to the extent required under applicable law and regulations. These and other risks and uncertainties are detailed from time to time in Conexant’s reports filed with the SEC. Investors are advised to read Conexant’s Annual Report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC, particularly those sections entitled “Risk Factors”, for a more complete discussion of these and other risks and uncertainties.
Conexant is a registered trademark of Conexant Systems, Inc.