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MACOM announces agreement to acquire Mindspeed

Mindspeed intends to sell its wireless business before closing transaction
 M/A-COM Technology Solutions Holdings, Inc. (MACOM), a supplier of high performance RF, microwave, and millimeter wave products, has announced it has entered into a definitive agreement to acquire Mindspeed Technologies, Inc. (Mindspeed), a supplier of semiconductor solutions for communications infrastructure applications, for $5.05 per share in a cash tender offer. 

Mindspeed is also in advanced discussions with a potential strategic buyer for its wireless business, which it intends to sell prior to closing of the MACOM transaction. 

Highlights of the transaction include: 

• The companies’ combined trailing twelve months (TTM) revenue is approximately $451 million with non-GAAP gross margin of approximately 50%, excluding Mindspeed’s wireless business. 

• Cash transaction valued at $272 million for Mindspeed’s $132 million in TTM revenue (excluding wireless business and non-recurring revenue from sales of intellectual property) and $26 million of cash and cash equivalents at September 27, 2013. 

• MACOM expects substantial annual synergies from reduction in corporate overhead, corporate R&D overhead, SG&A and exiting underperforming businesses. 

• Expected to be immediately accretive to MACOM’s non-GAAP earnings per share with expected non-GAAP EPS accretion between $0.15 and $0.20 per share in fiscal 2014 and between $0.25 and $0.30 per share in fiscal 2015. 

• Positions MACOM to be a global leader in 100G optical networking and expands MACOM’s addressable market, moving from long-haul to data centers and metro markets. 

• Complements MACOM’s current product offerings with a high performance analog (HPA) portfolio of low latency crosspoint switches, integrated optical physical media devices (PMDs) and low power signal conditioners. 

• Diversifies MACOM’s served markets to include Enterprise applications. 

• Expands MACOM’s addressable RF and Microwave market with the addition of high performance Silicon Germanium (SiGe) capability. 

• Complements MACOM’s strong U.S. presence with a broadened customer footprint and strong sales channel in the Asia Pacific region. 

Commenting on the transaction, John Croteau, President and Chief Executive Officer stated, “This acquisition will position MACOM as a leading global provider of 100G optical solutions
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