Littelfuse To Buy IXYS In Cash, Stock Deal Worth $750 Mln In Equity Value

(RTTNews) - Littelfuse, Inc. (LFUS) and IXYS Corp. (IXYS) announced Monday that they have entered into a definitive agreement under which Littelfuse will acquire IXYS in a cash and stock transaction. The deal represents an equity value of approximately $750 million and enterprise value of $655 million.

Under the terms of the agreement, each IXYS stockholder will be entitled to elect to receive, per IXYS share, either $23 in cash or 0.1265 of a share of Littelfuse common stock, subject to proration. In total, 50% of IXYS stock will be converted into the cash election option and 50% into the stock election option.

The transaction is expected to be immediately accretive to Littelfuse's adjusted earnings per share and free cash flow in the first full year post transaction close, excluding any acquisition and integration related costs.

Littelfuse expects to achieve more than $30 million of annualized cost savings within the first two years after the deal closure. Longer term, the combination would create significant revenue synergy opportunities.

The deal is expected to close in the first calendar quarter of 2018, subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by IXYS stockholders.

Littelfuse expects to finance the cash portion of the transaction consideration through a combination of existing cash and additional debt.

The combined company is expected to have annual revenues of approximately $1.5 billion, with the following compelling strategic and financial benefits:

IXYS is a global pioneer in the power semiconductor and integrated circuit markets with a focus on medium to high voltage power control semiconductors. IXYS reported revenues of $322 million in its fiscal 2017 with an adjusted EBITDA margin of approximately 13.5%.

"IXYS will operate as the cornerstone of the combined companies' power semiconductor business," said Nathan Zommer, Chairman and Chief Executive Officer of IXYS.

Under the deal, Zommer, IXYS founder and currently the company's largest stockholder with approximately 21% ownership, has entered into a voting and support agreement.

After close of the transaction, Zommer is expected to join Littelfuse's Board of Directors, subject to the board's governance and approval process.