Microsemi To Buy Symmetricom For About $230 Mln

(RTTNews) - Power-management chip maker Microsemi Corp. (MSCC) has agreed to buy atomic-clock technology provider Symmetricom, Inc. (SYMM) for about $230 million, net of Symmetricom's projected cash balance at closing, the two companies said Monday. Shares of Symmetricom gained almost 50 percent in extended trades following the announcement of the deal.

San Jose, California-based Symmetricom is a provider of timekeeping technologies and solutions that enable next-generation data, voice, mobile and video networks and services. The company generates, distributes and applies precise time for the communications, aerospace/defense, IT infrastructure and metrology industries. Symmetricom offers timekeeping in GPS satellites, national time references and national power grids.

Under the terms of the deal, Aliso Viejo, California-based Microsemi will commence a cash tender offer to acquire Symmetricom's outstanding common shares at $7.18 per share in cash. The offer price represents a 50.5 percent premium of to Symmetricom's closing stock price of $4.77 on Monday. The boards of directors of both companies have approved the terms of the deal.

Symmetricom's board of directors have unanimously recommended that the company's stockholders tender their shares in the tender offer. The deal does not require the approval of the stockholders of Microsemi.

James Peterson, president and chief executive officer of Microsemi said, "The acquisition of Symmetricom will create the largest and most complete timing portfolio in the industry today. From source to synchronization to distribution, Microsemi will offer an end to end timing solution for an expanded range of markets, driving increased dollar content opportunity and revenue growth."

Elizabeth Fetter, Symmetricom's chief executive officer said, "I believe Microsemi is the ideal company to leverage Symmetricom's technology and capabilities further into the communications market along with the scale to accelerate the adoption of the company's innovative new chip scale atomic clock (CSAC) technology into broader markets."

Microsemi said that all Symmetricom shares not tendered in the tender offer will be converted into the right to receive $7.18 per share in cash. The company expects the tender offer to close in its fiscal first quarter, ending December 29, 2013.

However, under the terms of the merger deal, Symmetricom may solicit superior proposals from third parties for a "go shop" period that extends through November 8. Jefferies LLC, which is acting as Symmetricom's financial adviser, will assist Symmetricom with Symmetricom's go-shop process.

The merger agreement provides Microsemi with a customary right to match a superior proposal. The agreement also provides for certain termination fees payable to Microsemi in connection with the termination of the agreement in certain circumstances.

Microsemi expects significant synergies from the immediately accretive transaction. Based on current assumptions, the company expects the acquisition to be accretive by $0.22 to $0.25 per share in its first full calendar year ending December 2014.

Microsemi reaffirmed its fiscal fourth-quarter guidance that were included in its fiscal third quarter earnings release issued on July 25. The company currently plans to announce its fiscal fourth quarter results on November 7.

In a separate statement, Symmetricom said it has accelerated the release of its first-quarter fiscal 2014 earnings, suspended its prior practice of providing quarterly financial guidance and cancelled its conference call to discuss first quarter fiscal 2014 results scheduled for Tuesday, October 22.

Symmetricom's net loss for the first quarter was $1.00 million or $0.02 per share, wider than net loss of $0.20 million or $0.01 per share in the year-ago period. Adjusted net income was $0.90 million or $0.02 per share, compared to adjusted net income of $1.56 million or $0.04 per share in the same period last year.

Net revenue for the quarter declined to $48.04 million from $56.39 million in the same period last year.

MSCC closed Monday's regular trading at $25.56, down $0.20 or 0.78 percent on a volume of 542,724 shares.

SYMM closed Monday's regular trading at $4.77, down $0.20 or 4.02 percent on a volume of 260,906 shares. However, in after-hours, the stock gained $2.38 or 49.90 percent to $7.15.