Microsemi to acquire Vitesse Semiconductor

Microsemi Corp. (NASDAQ: MSCC) will continue its expansion via M&A with the acquisition of Vitesse Semiconductor Corp. (NASDAQ: VTSS). Microsemi says it has agreed to buy the communications semiconductor company for $5.28 per share in cash. The deal would therefore be worth approximately $389 million.

The price represents a premium of 32% based on the average closing price of Vitesse's shares of common stock during the 30 trading days ended March 17, 2015. Vitesse's board has recommended unanimously that the company's shareholders tender their shares in the tender offer.

The upcoming deal follows Microsemi's recent acquisition of Centellax (see "Microsemi to snap up Centellax"). "This acquisition is further evidence of Microsemi's continuing commitment to grow as a communications semiconductor company," stated James J. Peterson, Microsemi chairman and CEO. "Vitesse's highly complementary technology suite will expand our product offering and accelerate growth with differentiated technology in emerging markets, while benefitting from the increased scale, consolidated infrastructure, and cost savings of the combined entity."

Microsemi says the synergies from the deal will be "significant." It expects to see immediate accretion in the first full quarter after the deal closes, a milestone expected during Microsemi's fiscal third quarter, which ends June 28, 2015. Based on current assumptions, Microsemi expects the acquisition to be $0.16 to $0.20 per share accretive in its first full fiscal year ending September 30, 2016.

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