NEW YORK - Analog Devices, Inc (ADI)., a global leader in high-performance semiconductors for signal processing applications, has entered into a definitive agreement to acquire Hittite Microwave Corporation in a deal valued at $2 billion in cash
Analog's offer of $78 per share is 29 percent more than Hittite's closing price of $60.56 per share on June 6. Both chipmakers' boards approved the deal which is expected to close near the end of ADI's third fiscal quarter of 2014, subject to regulatory approvals and other customary closing conditions.
In early trading Hittite Microwave Corp (HITT) stock rose 28.40% at $77.75.
The deal is expected to help Analog Devices strengthen its radio frequency (RF) and signal conversion chip offerings given Chelmsford, Massachusetts-based Hittite's expertise as an innovative designer and manufacturer of high performance integrated circuits, modules, subsystems and instrumentation for RF, microwave and millimeter wave applications,.
A world leader in data conversion and signal conditioning technology, Analog Devices serves over 60,000 customers, representing virtually all types of electronic equipment.
Norwood, Massachusetts headquartered Analog Devices expects to fund the acquisition through a combination of cash on hand and short-term debt financing. The Boards of Directors of each company have approved the transaction, The transaction is expected to be accretive to ADI's non-GAAP earnings per share.
"Hittite's strength in RF, microwave, and millimeter wave technology complements ADI's RF and signal conversion expertise," said Vincent Roche, ADI President and CEO.
"Our combined capabilities will enable us to bring more complete solutions to our customers and address more of the industrial, communications infrastructure, and automotive markets."
"We welcome the very talented Hittite team, as we together leverage our strong product portfolios and customer relationships to create greater value for all our stakeholders," said Roche.
The company forecast an adjusted profit of 60-64 cents per share. Analog said it expected revenue to rise by 1-5 percent from the second quarter, which translates into $701.4 million-$729.2 million. Credit Suisse acted as financial adviser to Analog Devices. Hittite was advised by Deutsche Bank.
Rick D. Hess, President and CEO of Hittite stated, "We are delighted to join forces with ADI, a premier company that shares Hittite's passion for solving complex challenges for customers.
"I look forward to joining Analog Devices and I am confident our combined efforts will accelerate the course of innovation throughout cellular and microwave communications infrastructure, automotive, industrial instrumentation, aerospace and defense."