SEPTMBER 18, 2006 -- Freescale Semiconductor Inc. (search for Freescale) has entered into a definitive merger agreement to be acquired by a private equity consortium in a transaction with a total equity value of $17.6 billion. The consortium is led by The Blackstone Group, and includes The Carlyle Group, Permira Funds and Texas Pacific Group.
Under the terms of the merger agreement, the consortium will acquire all of the outstanding Class A and Class B shares of Freescale for $40 per share in cash, representing a premium of approximately 36% over Freescale's average closing share price during the 30 trading days ended September 8, 2006. The company first acknowledged it was in discussions with third parties regarding a possible transaction on September 11, 2006.
The board of directors of Freescale has unanimously approved the merger agreement and resolved to recommend that Freescale's stockholders adopt the agreement.
There is no financing condition to the obligations of the private equity consortium to consummate the transaction, and equity and debt commitments for the full amount of the merger consideration have been received. It is currently anticipated that substantially all of the company's outstanding notes will either be tendered for or repaid.
The merger is subject to customary conditions to closing, including the affirmative vote of Freescale stockholders and requisite antitrust approvals. The merger agreement contains a provision under which Freescale may solicit alternative proposals from third parties during the next 50 calendar days. In addition, Freescale may, at any time, subject to the terms of the merger agreement, respond to unsolicited proposals. If the company accepts a superior proposal, a break-up fee would be payable by the company. There can be no assurance of any alternative proposal.
Goldman, Sachs & Co. serves as financial advisor to Freescale and provided a fairness opinion in connection with the transaction. Wilson Sonsini Goodrich & Rosati Professional Corp. serves as legal adviser to Freescale in connection with the transaction.
Credit Suisse Securities (USA) LLC, Citigroup Corporate and Investment Banking and Blackstone Corporate Advisory Services act as financial advisors to the private equity consortium. Skadden, Arps, Slate, Meagher & Flom LLP serves as legal adviser to the private equity consortium in connection with the transaction.
Visit Freescale Semiconductor