-
Highly complementary product portfolios create the industry's
most comprehensive suite of high-performance analog offerings
-
Unique combination of engineering talent, technology, and
application domain expertise creates unparalleled innovation and
support partner for customers
-
Best-in-Class financial model with strong free cash flow
generation profile - expected to be immediately accretive to Analog
Devices' non-GAAP EPS and free cash flow
NORWOOD, Mass. & MILPITAS, Calif.--(BUSINESS WIRE)--
Analog Devices, Inc. (NASDAQ: ADI) ("Analog Devices") and Linear
Technology Corporation (NASDAQ: LLTC) ("Linear Technology") today
announced that they have entered into a definitive agreement under which
Analog Devices will acquire Linear Technology in a cash and stock
transaction that values the combined enterprise at approximately $30
billion(1). Upon completion of the acquisition, Analog
Devices will be the premier global analog technology company with
approximately $5 billion in anticipated annual revenues.
Under the terms of the agreement, Linear Technology shareholders will
receive $46.00 per share in cash and 0.2321 of a share of Analog Devices
common stock for each share of Linear Technology common stock they hold
at the closing of the transaction. The transaction values Linear
Technology at approximately $60.00 per share(1), representing
an equity value for Linear Technology of approximately $14.8 billion(1).
"The combination of Analog Devices and Linear Technology brings together
two of the strongest business and technology franchises in the
semiconductor industry," said Vincent Roche, President and Chief
Executive Officer of Analog Devices. "Our shared focus on engineering
excellence and our highly complementary portfolios of industry-leading
products will enable us to solve our customers' biggest and most complex
challenges at the intersection of the physical and digital worlds. We
are creating an unparalleled innovation and support partner for our
industrial, automotive, and communications infrastructure customers, and
I am very excited about what this acquisition means for our customers,
our employees, and our industry."
Bob Swanson, Executive Chairman and Co-founder of Linear Technology,
added, "For 35 years, Linear Technology has had great success by growing
its business organically. However, this combination of Linear Technology
and Analog Devices has the potential to create a combination where one
plus one truly exceeds two. As a result, the Linear Technology Board
concluded that this is a compelling transaction that delivers
substantial value to our shareholders, and the opportunity for
additional upside through stock in the combined company. Analog Devices
is a highly respected company. By combining our complementary areas of
technology strength, we have an excellent opportunity to reinforce our
leadership across the analog and power semiconductor markets, enhancing
shareholder value. Together, Linear Technology and Analog Devices will
advance the technology and deliver innovative analog solutions to our
customers worldwide. We are committed to working with the ADI team to
ensure a smooth transition."
Compelling Strategic and Financial Benefits
-
Global High-Performance Analog Industry Leader: Combination
expected to create a global high-performance analog industry leader
across data converters, power management, amplifiers, interface, and
RF and microwave products
-
Highly Complementary Businesses: Highly complementary
product portfolios create the industry's most comprehensive suite of
high-performance analog offerings and expand Analog Devices' total
addressable market to $14 billion from $8 billion
-
Leading Positions & Commitment to Customers: Combined
company expected to be a leader across all major high-performance
analog product categories and will have a shared commitment to
providing customers with the highest levels of innovation, service,
and support
-
Accelerates Innovation and Revenue Growth in Attractive Markets: Unique
combination of engineering excellence and domain expertise accelerates
innovation and revenue growth opportunities in the industrial,
automotive, and communications infrastructure markets
-
Best-in-Class Financial Model: Value of innovation and
engineering excellence reflected in best-in-class financial model,
non-GAAP margins, and free cash flow
-
Accretive Transaction: The transaction is expected to be
immediately accretive to Analog Devices' non-GAAP EPS and free cash
flow. Analog Devices expects to achieve $150 million of annualized
run-rate cost synergies within 18 months post transaction close
Mr. Roche concluded, "We have tremendous respect and admiration for the
franchise created by Linear Technology. I have no doubt that the
combination of our two companies will create a trusted leader in our
industry, capable of generating tremendous value for all of our
stakeholders."
Following the transaction close, Mr. Roche, President and CEO of Analog
Devices will continue to serve as President and CEO of the combined
company, and David Zinsner, SVP and CFO of Analog Devices, will continue
to serve as SVP and CFO of the combined company. Analog Devices and
Linear Technology anticipate a combined company leadership team with
strong representation from both companies across all functions. The
Linear Technology brand will continue to serve as the brand for Analog
Devices' power management offerings. The combined company will use the
name Analog Devices, Inc. and continue to trade on the NASDAQ under the
symbol ADI.
Transaction Structure and Terms
Under the terms of the
agreement, Linear Technology shareholders will receive $46.00 per share
in cash and 0.2321 of a share of Analog Devices common stock for each
share of Linear Technology common stock they hold at closing. The
transaction values Linear Technology at approximately $60.00 per share(1),
representing an equity value for Linear Technology of approximately
$14.8 billion(1). Post-closing, Linear Technology
shareholders will own approximately 16% of the combined company on a
fully-diluted basis.
Analog Devices intends to fund the transaction with approximately 58
million new shares of Analog Devices common stock, approximately $7.3
billion of new long-term debt, and the remainder from the combined
company's balance sheet cash. The new long-term debt is supported by a
fully underwritten bridge loan commitment and is expected to consist of
term loans and bonds, with emphasis on pre-payable debt, to facilitate
rapid deleveraging.
This transaction has been unanimously approved by the boards of
directors of both companies. Closing of the transaction is expected by
the end of the first half of calendar year 2017, and is subject to
regulatory approvals in various jurisdictions, the approval of Linear
Technology's shareholders, and other customary closing conditions.
Analog Devices Financial Guidance
Analog Devices also
narrowed and raised its financial guidance for its third quarter of
fiscal year 2016, for revenue to be approximately $865 million, and for
diluted earnings per share to be in the range of $0.71 to $0.72, and
non-GAAP diluted earnings per share to be in the range of $0.77 to
$0.78. The non-GAAP EPS estimate reflects estimated adjustments for
amortization of purchased intangible assets and depreciation of step up
value on purchased fixed assets, which total $19 million in the
aggregate.
Advisors
Credit Suisse is acting as exclusive
financial advisor to Analog Devices, and Wachtell, Lipton, Rosen & Katz
and Wilmer Cutler Pickering Hale and Dorr LLP are serving as its legal
advisors. J.P. Morgan, Bank of America Merrill Lynch, and Credit Suisse
are providing committed debt financing for the transaction. Qatalyst
Partners is acting as exclusive financial advisor to Linear Technology,
and Jones Day is serving as its legal advisor.
Conference call and Webcast Information
Analog Devices and
Linear Technology management will host a conference call today, July 26,
2016 at 5:00pm ET to discuss details of the transaction. A live webcast
and the accompanying presentation relating to the transaction will be
available in the "investors" section of Analog Devices' website at www.analog.com
in advance of the conference call.
Investors may join via webcast, accessible at investor.analog.com,
or by telephone (call 800-859-9560 ten minutes before the call begins
and provide the password "ADI").
A replay of the call will be made available and may be accessed for up
to two weeks by dialing (855) 859-2056 (replay only) and providing the
conference ID: 56173988, or by visiting investor.analog.com.
About Analog Devices
Analog
Devices designs and manufactures semiconductor products and solutions.
We enable our customers to interpret the world around us by
intelligently bridging the physical and digital with unmatched
technologies that sense, measure and connect. Visit http://www.analog.com.
About Linear Technology
Linear
Technology, a member of the S&P 500, has been designing, manufacturing
and marketing a broad line of high performance analog integrated
circuits for major companies worldwide for over three decades. The
company's products provide an essential bridge between our analog world
and the digital electronics in communications, networking, industrial,
automotive, computer, medical, instrumentation, consumer, and military
and aerospace systems. Linear Technology produces power management, data
conversion, signal conditioning, RF and interface ICs, µModule®
subsystems, and wireless sensor network products. For more information,
visit www.linear.com.
Note:
(1) Based on Analog Devices' 5-day volume weighted average
price of $60.3215 as of July 21, 2016 per Bloomberg.
Forward Looking Statements
This press release contains forward-looking statements, which address
a variety of subjects including, for example, the expected timetable for
closing of the transaction between Analog Devices, Inc. ("Analog
Devices") and Linear Technology Corporation ("Linear Technology"), the
expected benefits and synergies of the transaction, including the effect
of the transaction on Analog Devices' revenues, non-GAAP earnings, free
cash flow, capital returns and expected growth rates of the combined
companies, Analog Devices' expected product offerings, product
development, marketing position and technical advances resulting from
the transaction, the availability of debt financing for the transaction,
Analog Devices' timing and ability to repay the debt and Analog Devices'
guidance for its third quarter of fiscal 2016. Statements that are not
historical facts, including statements about our beliefs, plans and
expectations, are forward-looking statements. Such statements are based
on our current expectations and are subject to a number of factors and
uncertainties, which could cause actual results to differ materially
from those described in the forward-looking statements. The following
important factors and uncertainties, among others, could cause actual
results to differ materially from those described in these
forward-looking statements: the ability to satisfy the conditions to
closing of the proposed transaction, on the expected timing or at all;
the ability to obtain required regulatory approvals for the proposed
transaction, on the expected timing or at all, including the potential
for regulatory authorities to require divestitures in connection with
the proposed transaction; the occurrence of any event that could give
rise to the termination of the merger agreement; the risk of stockholder
litigation relating to the proposed transaction, including resulting
expense or delay; higher than expected or unexpected costs associated
with or relating to the transaction; the risk that expected benefits,
synergies and growth prospects of the transaction may not be achieved in
a timely manner, or at all; the risk that Linear Technology's business
may not be successfully integrated with Analog Devices' following the
closing; the risk that Analog Devices and Linear Technology will be
unable to retain and hire key personnel; and the risk that disruption
from the transaction may adversely affect Linear Technology's or Analog
Devices' business and relationships with their customers,
suppliers or employees. For additional information about factors that
could cause actual results to differ materially from those described in
the forward-looking statements, please refer to both Analog Devices' and
Linear Technology's filings with the Securities and Exchange Commission
("SEC"), including the risk factors contained in each of Analog Devices'
and Linear Technology's most recent Quarterly Reports on Form 10-Q and
Annual Report on Form 10-K. Forward-looking statements represent
management's current expectations and are inherently uncertain. Except
as required by law, we do not undertake any obligation to update
forward-looking statements made by us to reflect subsequent events or
circumstances.
Important Additional Information Will Be Filed With The SEC
In connection with the proposed transaction, Analog Devices and Linear
Technology intend to file relevant information with the SEC, including a
registration statement of Analog Devices on Form S-4 (the "registration
statement") that will include a prospectus of Analog Devices and a proxy
statement of Linear Technology (the "proxy statement/prospectus").
INVESTORS AND SECURITY HOLDERS OF LINEAR TECHNOLOGY ARE URGED TO
CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND PROXY
STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC
WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT ANALOG DEVICES, LINEAR TECHNOLOGY AND THE PROPOSED
TRANSACTION. A definitive proxy statement/prospectus will be sent to
Linear Technology's shareholders. The registration statement, proxy
statement/prospectus and other documents filed by Analog Devices with
the SEC may be obtained free of charge at Analog Devices' website at www.analog.com
or at the SEC's website at www.sec.gov.
These documents may also be obtained free of charge from Analog Devices
by requesting them by mail at Analog Devices, Inc., One Technology Way,
P.O. Box 9106, Norwood, MA 02062-9106, Attention: Investor Relations, or
by telephone at (781) 461-3282. The documents filed by Linear Technology
with the SEC may be obtained free of charge at Linear Technology's
website at www.linear.com
or at the SEC's website at www.sec.gov.
These documents may also be obtained free of charge from Linear
Technology by requesting them by mail at Linear Technology Corporation,
1630 McCarthy Blvd., Milpitas, CA, 95035-7417, Attention: Investor
Relations, or by telephone at (408) 432-2407.
Participants in the Solicitation
Linear Technology, Analog Devices and certain of their directors,
executive officers and employees may be deemed participants in the
solicitation of proxies from Linear Technology shareholders in
connection with the proposed transaction. Information regarding the
persons who may be deemed to be participants in the solicitation of
Linear Technology shareholders in connection with the proposed
transaction, including a description of their direct or indirect
interests, by security holdings or otherwise, will be set forth in the
proxy statement/prospectus when it is filed with the SEC. Information
about the directors and executive officers of Analog Devices and their
ownership of Analog Devices' common stock is set forth in the definitive
proxy statement for the Analog Devices' 2016 annual meeting of
shareholders, as previously filed with the SEC on January 28, 2016.
Information about the directors and executive officers of Linear
Technology and their ownership of Linear Technology common stock is set
forth in the definitive proxy statement for Linear Technology's 2015
annual meeting of shareholders, as previously filed with the SEC on
September 17, 2015. Free copies of these documents may be obtained as
described in the paragraphs above.
Non-Solicitation
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to buy
any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any
such jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160726006455/en/
Investor Contacts
Analog
Devices:
Ali Husain, 781-461-3282
Treasurer & Director
of Investor Relations
investor.relations@analog.com
or
Mike
Lucarelli, 781-461-3282
Senior Manager Investor Relations
investor.relations@analog.com
or
Linear
Technology:
Donald P. Zerio, 408-432-1900
Vice
President, Finance, Chief Financial Officer
or
Media
Contacts
Analog Devices:
Gerald
Kimber White, 781-461-3839
Senior Director Corporate Communications
gerald.kimberwhite@analog.com
or
Sard
Verbinnen & Co:
John Christiansen, 415-618-8750
jchristiansen@sardverb.com
or
Margaret
Popper, 212-687-8080
mpopper@sardverb.com
or
Linear
Technology:
John Hamburger, 408-432-1900 x2419
Director,
Marketing Communications
jhamburger@linear.com
Source: Analog Devices, Inc.
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