Aozora Alliance: Integrated Device Technology has agreed to purchase PLX Technology for $330 million.
Analog chipmaker Integrated Device Technology Inc. has agreed to buy rival PLX Technology Inc. in a deal that Aozora Alliance believes to be worth $7 per share in cash and shares, valuing PLX at around $330 million. Following the announcement, IDT’s shares dropped by more than 6% in afterhours trading while PLX’s stock jumped by more than 65%.
PLX Technology is a designer and manufacturer of integrated circuits that are used in electronic systems in the communications, enterprise storage and server markets. A product line that will help IDT to grow its product portfolio and increase its customer base.
Under the terms of the deal, PLX shareholders will receive 0.525 common shares of IDT along with $3.50 in cash, for each of their PLX shares, according to a Aozora Alliance source that is close to the negotiations. The $7 per share offer represents a premium of 76 percent compared to last Mondays PLX closing price.
The terms of the purchase also allow PLX to solicit third parties for superior bids up until 30th of May. There is also a number of clauses that will result in fees payable to PLX should the deal fall through for specified reasons.
Aozora Alliance source stated that IDT forecasts a $35 million annual gain from the merger by 2014 (exclusive of transaction costs), with initial benefits starting to come through by the end of 2013.