Integrated Silicon To Be Acquired By Chinese Consortium For $640 Mln; Stock Up

(RTTNews) - Integrated Silicon Solution Inc (ISSI), a fabless semiconductor company, on Thursday said it has agreed to be acquired by a Chinese consortium for $639.5 million.

As per the terms of the deal, the Chinese semiconductor-focused consortium led by Summitview Capital will pay Integrated Silicon $19.25 per share in cash - representing a 16 percent premium over the stock's closing price on Wednesday. The consortium also includes eTown MemTek Ltd, Hua Capital and Huaqing Jiye.

Investors cheered the announcement as Integrated Silicon shares gained more than 12 percent in morning trade on the Nasdaq.

The deal comes as Integrated Silicon was under pressure from activist investor Starboard Value LP which had urged the company to leverage growth opportunities and boost core businesses as part of efforts to enhance shareholder value.

The deal is expected to close in the third calendar quarter of 2015, and is subject to approval by the stockholders of Integrated Silicon, among other regulatory approvals.

Integrated Silicon said its board has unanimously approved the deal and recommends that stockholders also vote in its favor.

Also as part of the deal, Integrated Silicon's Taiwan operations will be restructured or some or all of that operations will be sold as necessary to comply with the requirements of Taiwan laws.

Commenting on the deal, Integrated Silicon Chief Executive Officer Scott Howarth said the transaction creates significant value for stockholders and supports innovation for long-term customers.

In December, activist investors Starboard Value LP urged Integrated Silicon to leverage opportunities to enhance shareholder value. The company said non-core initiatives are weighing down on the profitable and growing core specialty memory business. Starboard also had announced plans to nominate five candidates to Integrated Silicon's board.

Integrated Silicon makes high performance integrated circuits for the automotive, communications, industrial and digital consumer markets. The Silicon Valley-based company had reported 2014 revenues of $329 million.

ISSI is trading at $18.68, up $2.11 or 12.73%, on a volume of 2 million shares.