Under the terms of the definitive agreement unanimously approved by the board of directors of both companies, shareholders of Sawtek Inc. will receive 1.1507 shares of TriQuint Semiconductor common stock for each share of Sawtek common stock. Based on Monday’s closing price of $26.30 for TriQuint’s common stock, the transaction will have an estimated value, on a fully diluted basis, of approximately $1.3 billion. Upon the closing of the transaction, TriQuint shareholders will hold approximately 64% of the combined company, with former Sawtek shareholders holding approximately 36%. The transaction, anticipated to close in the third quarter of 2001, is subject to approval by the TriQuint and Sawtek shareholders and other customary closing conditions, including obtaining necessary regulatory approvals. The combined company will trade under the symbol TQNT on the NASDAQ National Market upon closing.
The merger will be a tax-free exchange of shares and will be accounted for as a pooling of interests. On a pro-forma basis for the calendar year ended December 31, 2000, the merger of Sawtek into TriQuint would be accretive to TriQuint’s earnings per share for that period. TriQuint had revenues of $300.7 million for the calendar year 2000 and Sawtek had revenues of $159.8 million for its fiscal year ended September 30, 2000. The combined company will have over 1,700 employees upon completion of the merger. Sawtek will operate as a wholly-owned subsidiary of TriQuint Semiconductor and will continue to manufacture and sell products under the Sawtek name.
Benefits of the Merger
The benefits for both customers and shareholders expected to be derived from this synergistic combination of two industry leaders are significant. Radio Frequency Integrated Circuits (RFIC) and high precision SAW devices are arguably the most critical components in the RF section of today’s wireless products. The combination of TriQuint and Sawtek will result in a company whose technical capabilities and product portfolio are without equal in the industry. The merger will further broaden an already diverse customer base and allow the combined sales force to expand market share through outstanding relationships at complementary customers. As wireless OEMs seek to streamline their operations and reduce their supplier base, it has become increasingly important for RF component vendors to offer a broad range of leading-edge products.
The most significant benefit of the proposed combination is the total focus and unique technical capabilities that will be directed towards the development of RF modules for handsets and other wireless products. While high levels of integration have been achieved in the digital portions of these products, the radio frequency sections are still dominated by large numbers of discrete or partially integrated components. Together, Sawtek and TriQuint are committed to becoming a dominant supplier of highly integrated RF modules that should offer significant cost, size and logistics benefits to the wireless OEM community. We believe that attacking this lucrative and large market opportunity as a combined entity will enhance our chances for success.
Sawtek has an impressive technical and financial record as a leader in Surface Acoustical Wave (SAW) devices, said Steven J. Sharp, TriQuint’s Chairman, President and CEO. This strength plus our strength in active devices will give us both the capability to be a major player in creating integrated solutions for applications such as mobile phones and optical networks. This will enable us to sell complete RF front-end modules to new and existing customers.
Kimon Anemogiannis, President and CEO of Sawtek Inc., stated, We are very excited about combining forces with TriQuint, who has clearly demonstrated the technical and financial leadership that will be keys to success in the future. While RFICs and SAW filters must work together to maximize radio performance, there has been very little effort in the past in this direction. The combination of our engineering talents should result in integrated products that are optimized for maximum performance and minimum cost.
SOURCE: COMPANY PRESS RELEASE