- 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
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 TermsUnder 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 GuidanceAnalog 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.
AdvisorsCredit 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 InformationAnalog 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 DevicesAnalog
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
TechnologyLinear 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.
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Investor
ContactsAnalog Devices:Ali
Husain, 781-461-3282Treasurer & Director of Investor
Relationsinvestor.relations@analog.comorMike Lucarelli,
781-461-3282Senior Manager Investor
Relationsinvestor.relations@analog.comorLinear Technology:Donald P. Zerio,
408-432-1900Vice President, Finance, Chief Financial
OfficerorMedia
ContactsAnalog
Devices:Gerald Kimber White, 781-461-3839Senior Director
Corporate Communicationsgerald.kimberwhite@analog.comorSard Verbinnen & Co:John Christiansen,
415-618-8750jchristiansen@sardverb.comorMargaret Popper,
212-687-8080mpopper@sardverb.comorLinear
Technology:John Hamburger, 408-432-1900 x2419Director,
Marketing Communicationsjhamburger@linear.com
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