14 February 2017

IDT to acquire GigPeak for $250m

Integrated Device Technology Inc (IDT) of San Jose, CA, USA, which develops system-level mixed-signal solutions for the communications, computing, consumer, automotive and industrial markets, has agreed a tender offer to acquire GigPeak Inc of San Jose, CA, USA (formerly GigOptix) - which provides integrated circuits and software solutions for high-speed connectivity and high-quality video compression over the network and the cloud - for $3.08 per share ($250m in cash). This represents a premium of about 22% to GigPeak's closing share price on 10 February.

The acquisition provides IDT with an optical interconnect product and technology business that is complementary to its position in real-time interconnect products.

GigPeak's optical interface products are broadly used by companies in the communications, cloud data-center, and military/aviation markets. IDT says that it will now provide seamless ultra-high-speed data connectivity products using electrical, RF and optical technologies.

"GigPeak is a recognized leader in high-performance optical, RF and video transport technology, and is a perfect fit for IDT. The products, technology and culture of GigPeak all complement and represent an acceleration of our current strategy," comments IDT's president & CEO Gregory Waters. "We gain an exceptional group of talented people and valuable intellectual property with the GigPeak team," he adds.

"We find an exceptional culture, customers, business and technology compatibility with IDT," comments GigPeak's founder, chairman & CEO Dr Avi Katz. "Our leading product suite, which currently addresses the need for greater bandwidth across the network, will now have the advantage of leveraging the scale of resources and broad distribution channels of IDT."

The boards of directors of both GigPeak and IDT have unanimously approved the terms of the merger agreement, and GigPeak's board will recommend that its stockholders accept the offer. Subject to customary conditions (including the tender of the majority of the outstanding GigPeak shares), the transaction – which is not dependent on a financing condition - is expected to close during second-quarter 2017, after which GigPeak will be delisted from the New York Stock Exchange and integrated into IDT.

The acquisition is projected to add $16m in quarterly revenue at 70% non-GAAP gross margin, and to be immediately accretive to IDT's earnings in the first full quarter following the transaction's close.

Tags: GigOptix

Visit: www.gigpeak.com

Visit: www.IDT.com