Summary
Microchip Technology Inc. (MCHP) announced on February 3, 2010, its definitive agreement to acquire Silicon Storage Technology, Inc. (SST) for $2.85 per share in cash. This acquisition is structured as a merger where SST will become a wholly-owned subsidiary of Microchip. The transaction has been approved by the Boards of Directors of both companies and is subject to the approval of SST shareholders. This move represents a significant strategic step for Microchip, likely aimed at expanding its product portfolio and market reach within the semiconductor industry. Investors should note that the agreement includes standard covenants regarding business conduct, board recommendations, and restrictions on SST soliciting competing acquisition proposals. SST may be required to pay a termination fee under certain circumstances. The filing also indicates that Microchip exceeded a $1 billion annual net sales run rate based on its third fiscal quarter 2010 revenue, signaling strong operational performance alongside the strategic acquisition news.
Key Highlights
- 1Microchip Technology Inc. (MCHP) to acquire Silicon Storage Technology, Inc. (SST) via merger.
- 2Acquisition price set at $2.85 per share in cash for SST common stock.
- 3SST will become a wholly-owned subsidiary of Microchip upon completion.
- 4Transaction requires approval from SST shareholders.
- 5Both Microchip and SST Boards of Directors have approved the merger agreement.
- 6Microchip announced exceeding a $1 billion annual net sales run rate for the third fiscal quarter of 2010.