Microchip Technology To Purchase Atmel For $8.15/Shr - Quick Facts

(RTTNews) - Microchip Technology Inc. (MCHP) announced definitive agreement to acquire Atmel Corp. (ATML) for $8.15 per share in a combination of cash and common stock. Atmel will receive $7.00 per share in cash and $1.15 per share in Microchip common stock.

The acquisition price represents a total equity value of about $3.56 billion, and a total enterprise value of about $3.40 billion, after excluding Atmel's cash and investments net of debt on its balance sheet of approximately $155.0 million at December 31, 2015.

Atmel has decided that this transaction with Microchip is a superior proposal and has terminated its merger agreement with Dialog Semiconductor plc (DLGS). Atmel has paid Dialog a termination fee of $137.3 million.

Microchip also announced that its board has authorized an increase in the existing share repurchase program to 15.0 million shares of common stock from the approximately 11.4 million shares remaining under the prior authorization.

Microchip expects this transaction to be immediately accretive to non-GAAP earnings per share and anticipates achieving an estimated $170 million in synergies from cost savings and incremental revenue growth in fiscal year 2019 that begins on April 1, 2018.

Microchip also announced preliminary results for its third quarter of fiscal year 2016 of net sales of about $552 million and earnings per share of 62 to 63 cents on a non-GAAP basis.