- Increased scale and diversification from $8.2 billion1 revenue
portfolio that is positioned to capitalize on key secular growth
trends
- Enhances domain expertise and breadth of engineering
capabilities to develop more complete solutions to solve customers’
most complex problems
- Expected to be accretive to free cash flow at closing and
adjusted EPS in 18 months post-close with $275 million of cost
synergies by the end of year two
Analog Devices, Inc. (Nasdaq: ADI) and Maxim Integrated
Products, Inc. (Nasdaq: MXIM) today announced that they have
entered into a definitive agreement under which ADI will acquire
Maxim in an all stock transaction that values the combined
enterprise at over $68 billion2. The transaction, which was
unanimously approved by the Boards of Directors of both companies,
will strengthen ADI as an analog semiconductor leader with
increased breadth and scale across multiple attractive end
markets.
Under the terms of the agreement, Maxim stockholders will
receive 0.630 of a share of ADI common stock for each share of
Maxim common stock they hold at the closing of the transaction.
Upon closing, current ADI stockholders will own approximately 69
percent of the combined company, while Maxim stockholders will own
approximately 31 percent. The transaction is intended to qualify as
a tax-free reorganization for U.S. federal income tax purposes.
“Today’s exciting announcement with Maxim is the next step in
ADI’s vision to bridge the physical and digital worlds. ADI and
Maxim share a passion for solving our customers’ most complex
problems, and with the increased breadth and depth of our combined
technology and talent, we will be able to develop more complete,
cutting-edge solutions,” said Vincent Roche, President and CEO of
ADI. “Maxim is a respected signal processing and power management
franchise with a proven technology portfolio and impressive history
of empowering design innovation. Together, we are well-positioned
to deliver the next wave of semiconductor growth, while engineering
a healthier, safer and more sustainable future for all.”
“For over three decades, we have based Maxim on one simple
premise – to continually innovate and develop high-performance
semiconductor products that empower our customers to invent. I am
excited for this next chapter as we continue to push the boundaries
of what’s possible, together with ADI. Both companies have strong
engineering and technology know-how and innovative cultures.
Working together, we will create a stronger leader, delivering
outstanding benefits to our customers, employees and shareholders,”
said Tunç Doluca, President and CEO of Maxim Integrated.
Upon closing, two Maxim directors will join ADI’s Board of
Directors, including Maxim President and CEO, Tunç Doluca.
Compelling Strategic and Financial Rationale
- Industry Leader with Increased Global Scale: The
combination strengthens ADI’s analog semiconductor leadership
position with expected revenue of $8.2 billion1 and free cash flow
of $2.7 billion1 on a pro forma basis. Maxim’s strength in the
automotive and data center markets, combined with ADI’s strength
across the broad industrial, communications and digital healthcare
markets are highly complementary and aligned with key secular
growth trends. With respect to power management, Maxim’s
applications-focused product offerings complement ADI’s catalog of
broad market products.
- Enhanced Domain Expertise & Capabilities: Combining
best-in-class technologies will enhance ADI’s depth of domain
expertise and engineering capabilities from DC to 100 gigahertz,
nanowatts to kilowatts and sensor to cloud, with more than 50,000
products. This will enable the combined company to offer more
complete solutions, serve more than 125,000 customers and capture a
larger share of a $60 billion total addressable market3.
- Shared Passion for Innovation-led Growth: The
combination brings together similar cultures focused on talent,
innovation and engineering excellence with more than 10,000
engineers and approximately $1.5 billion1 in annual research and
development investment. The combined company will continue to be a
destination for the most talented engineers in multiple
domains.
- Earnings Accretion & Cost Savings: This transaction
is expected to be accretive to adjusted EPS in 18 months subsequent
to closing with $275 million of cost synergies by the end of year
two, driven primarily by lower operating expenses and cost of goods
sold. Additional cost synergies from manufacturing optimization are
expected to be realized by the end of year three subsequent to
closing.
- Strong Financial Position & Cash Flow Generation:
ADI expects the combined company to yield a stronger balance sheet,
with a pro forma net leverage ratio of approximately 1.2x4. This
transaction is also expected to be accretive to free cash flow at
close, enabling additional returns to shareholders.
Timing and Approvals
The transaction is expected to close in the summer of 2021,
subject to the satisfaction of customary closing conditions,
including receipt of U.S. and certain non-U.S. regulatory
approvals, and approval by stockholders of both companies.
Advisors
Morgan Stanley served as lead financial advisor to ADI. BofA
Securities also served as a financial advisor. Wachtell, Lipton,
Rosen & Katz served as legal counsel.
J.P. Morgan served as exclusive financial advisor to Maxim, and
Weil, Gotshal & Manges LLP served as legal counsel.
Conference Call and Webcast
Information
ADI will host a conference call to discuss the transaction
today, beginning at 8:30 am ET. Investors may join via webcast,
accessible on the investor relations sections of ADI’s website at
investor.analog.com. Investors may also join by telephone (call
(800) 859-9560, or (706) 634-7193 for international calls, ten
minutes before the call begins and provide the password "ADI").
A replay of the conference call will be available approximately
two hours after the call concludes and may be accessed for up to
two weeks, by dialing 855-859-2056 and entering the conference ID:
3573127.
About Analog Devices
Analog Devices (Nasdaq: ADI) is a leading global
high-performance analog technology company dedicated to solving the
toughest engineering challenges. We enable our customers to
interpret the world around us by intelligently bridging the
physical and digital with unmatched technologies that sense,
measure, power, connect and interpret. Visit
http://www.analog.com.
About Maxim Integrated
Maxim Integrated develops innovative analog and mixed-signal
products and technologies to make systems smaller and smarter, with
enhanced security and increased energy efficiency. We are
empowering design innovation for our automotive, industrial,
healthcare, mobile consumer, and cloud data center customers to
deliver industry-leading solutions that help change the world.
Learn more at http://www.maximintegrated.com.
Forward Looking Statements
This communication relates to a proposed business combination
transaction between Analog Devices, Inc. (“ADI”) and Maxim
Integrated Products, Inc. (“Maxim”). This communication contains
“forward-looking statements” within the meaning of the federal
securities laws. Forward-looking statements address a variety of
subjects, including, for example, projections as to the anticipated
benefits of the proposed transaction, the anticipated impact of the
proposed transaction on the combined organization’s business and
future financial and operating results, the expected amount and
timing of synergies from the proposed transaction, and the
anticipated closing date for the proposed transaction. Statements
that are not historical facts, including statements about ADI’s and
Maxim’s beliefs, plans and expectations, are forward-looking
statements. Such statements are based on ADI’s and Maxim’s 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.
Forward-looking statements often contain words such as “expect,”
“anticipate,” “intend,” “plan,” “believe,” "will," “estimate,”
“would,” “target” and similar expressions, as well as variations or
negatives of these words. The following important factors and
uncertainties, among others, could cause actual results to differ
materially from those described in these forward-looking
statements: the uncertainty as to the extent of the duration, scope
and impacts of the COVID-19 pandemic; political and economic
uncertainty, including any faltering in global economic conditions
or the stability of credit and financial markets, erosion of
consumer confidence and declines in customer spending;
unavailability of raw materials, services, supplies or
manufacturing capacity; changes in geographic scope or product or
customer mix; changes in export classifications, import and export
regulations or duties and tariffs; changes in ADI’s or Maxim’s
estimates of their expected tax rate based on current tax law;
ADI’s ability to successfully integrate Maxim’s businesses and
technologies; the risk that the expected benefits and synergies of
the proposed transaction and growth prospects of the combined
company may not be fully achieved in a timely manner, or at all;
adverse results in litigation matters, including the potential for
litigation related to the proposed transaction; the risk that ADI
or Maxim will be unable to retain and hire key personnel; the risk
associated with ADI’s and Maxim’s ability to obtain the approvals
of their respective shareholders required to consummate the
proposed transaction and the timing of the closing of the proposed
transaction, including the risk that the conditions to the
transaction are not satisfied on a timely basis or at all or the
failure of the transaction to close for any other reason or to
close on the anticipated terms, including the anticipated tax
treatment; the risk that any regulatory approval, consent or
authorization that may be required for the proposed transaction is
not obtained or is obtained subject to conditions that are not
anticipated; unanticipated difficulties or expenditures relating to
the transaction, the response of business partners and retention as
a result of the announcement and pendency of the transaction;
uncertainty as to the long-term value of ADI’s common stock; and
the diversion of management time on transaction-related matters.
These risks, as well as other risks related to the proposed
transaction, will be included in the registration statement on Form
S-4 and joint proxy statement/prospectus that will be filed with
the Securities and Exchange Commission (the “SEC”) in connection
with the proposed transaction. While the list of factors presented
here is, and the list of factors to be presented in the
registration statement on Form S-4 are, considered representative,
no such list should be considered to be a complete statement of all
potential risks and uncertainties. For additional information about
other factors that could cause actual results to differ materially
from those described in the forward-looking statements, please
refer to ADI’s and Maxim’s respective periodic reports and other
filings with the SEC, including the risk factors contained in ADI’s
and Maxim’s most recent Quarterly Reports on Form 10-Q and Annual
Reports on Form 10-K. Forward-looking statements represent
management’s current expectations and are inherently uncertain and
are made only as of the date hereof. Except as required by law,
neither ADI nor Maxim undertakes or assumes any obligation to
update any forward-looking statements, whether as a result of new
information or to reflect subsequent events or circumstances or
otherwise.
No Offer or Solicitation
This communication is not intended to and shall not constitute
an offer to buy or sell or the solicitation of an offer to buy or
sell any securities, or a solicitation of any vote or approval, 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 offering of securities shall be made, except by
means of a prospectus meeting the requirements of Section 10 of the
U.S. Securities Act of 1933, as amended.
Additional Information about the Merger and Where to Find
It
In connection with the proposed transaction, ADI intends to file
with the SEC a registration statement on Form S-4 that will include
a joint proxy statement of ADI and Maxim and that also constitutes
a prospectus of ADI. Each of ADI and Maxim may also file other
relevant documents with the SEC regarding the proposed transaction.
This document is not a substitute for the joint proxy
statement/prospectus or registration statement or any other
document that ADI or Maxim may file with the SEC. The definitive
joint proxy statement/prospectus (if and when available) will be
mailed to stockholders of ADI and Maxim. INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, JOINT PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE
FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO
THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY
BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security
holders will be able to obtain free copies of the registration
statement and joint proxy statement/prospectus (if and when
available) and other documents containing important information
about ADI, Maxim and the proposed transaction, once such documents
are filed with the SEC through the website maintained by the SEC at
http://www.sec.gov. Copies of the
documents filed with the SEC by ADI will be available free of
charge on ADI’s website at http://www.analog.com or by contacting ADI’s
Investor Relations Department by email at
investor.relations@analog.com or by phone at 781-461-3282. Copies
of the documents filed with the SEC by Maxim will be available free
of charge on Maxim’s website at investor.maximintegrated.com or by contacting
Maxim’s Investor Relations department by phone at 408-601-5697.
Participants in the Solicitation
ADI, Maxim and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information about the directors and executive officers of ADI,
including a description of their direct or indirect interests, by
security holdings or otherwise, is set forth in ADI’s proxy
statement for its 2020 annual meeting of shareholders, which was
filed with the SEC on January 24, 2020, and ADI’s Annual Report on
Form 10-K for the fiscal year ended November 2, 2019, which was
filed with the SEC on November 26, 2019. Information about the
directors and executive officers of Maxim, including a description
of their direct or indirect interests, by security holdings or
otherwise, is set forth in Maxim’s proxy statement for its 2019
annual meeting of shareholders, which was filed with the SEC on
September 27, 2019, and Maxim’s Annual Report on Form 10-K for the
fiscal year ended June 29, 2019, which was filed with the SEC on
August 21, 2019. Other information regarding the participants in
the proxy solicitations and a description of their direct and
indirect interests, by security holdings or otherwise, will be
contained in the joint proxy statement/prospectus and other
relevant materials to be filed with the SEC regarding the proposed
transaction when such materials become available. Investors should
read the joint proxy statement/prospectus carefully when it becomes
available before making any voting or investment decisions. You may
obtain free copies of these documents from ADI or Maxim using the
sources indicated above.
(ADI-WEB)
1 Based on FY19 reported financials for ADI and trailing twelve
months ending September 28, 2019 for Maxim.
2 Based on share price as of July 10, 2020 fully diluted shares
and latest reported net debt.
3 Source: WSTS Semiconductor Forecast for Analog in 2023.
4 As reported from most recent quarter end; ADI, May 2, 2020;
Maxim, March 28, 2020.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200713005204/en/
Contacts for ADI
Investor Contact: Analog Devices, Inc. Mr. Michael
Lucarelli Sr. Director of Investor Relations 781-461-3282
investor.relations@analog.com Media Contacts: Teneo Ms.
Andrea Calise 917-826-3804 andrea.calise@teneo.com
Teneo Ms. Andrea Duffy 646-984-0240 andrea.duffy@teneo.com
Contact for Maxim
Investor Contact: Maxim Ms. Kathy Ta Vice President,
Investor Relations 408-601-5697 kathy.ta@maximintegrated.com
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