(Adds details, background)
Nov 21 Analog chipmaker Macom Technology
Solutions Holdings Inc said on Monday it would buy
fellow chipmaker Applied Micro Circuits Corp for about
$770 million to expand its data center connectivity business.
Macom's offer of $8.36 per share, comprising of $3.25 of
cash and 0.1089 Macom shares, represents a premium of 15 percent
to Applied Micro's Friday close.
The deal comes at a time when the semiconductor industry has
been rapidly consolidating as chipmakers seek to cut costs, meet
demand for cheaper chips and diversify into different product
Lowell, Massachusetts-based Macom provides chips for
wireless, satellite and fiber optic networks. Its chips are used
by telecom, aerospace and defense companies.
Buying Santa Clara, California-based Applied Micro will help
Macom expand into the market for data center connectivity chips.
Excluding Applied Micro's computing business, Macom said it
expects the deal to add to its adjusted earnings per share and
adjusted gross margin in the year ending September 2017.
Macom said it would sell Applied Micro's computing chip
business after the deal closes.
Evercore was Macom's financial adviser and Ropes & Gray LLP
provided legal counsel.
Morgan Stanley & Co LLC advised Applied Micro and Pillsbury
Winthrop Shaw Pittman LLP was its legal adviser.
(Reporting by Supantha Mukherjee and Anya George Tharakan in
Bengaluru; Editing by Sai Sachin Ravikumar)