SAN JOSE, Calif. Acquicor Technology Inc., the ''blank check'' equity firm run by three former executives from Apple Computer Inc., Tuesday (Sept. 26) said that it has acquired specialty foundry provider Jazz Semiconductor Inc. for $260 million in cash.
The equity firm was recently formed by three industry veterans from Apple and other companies: Gilbert Amelio, Ellen Hancock and Steve Wozniak. Acquicor (Newport Beach, Calif.) does not make or sell any products, but rather it will seek acquisitions in the technology sector.
One of the firm's first deals is Jazz Semiconductor. Upon completion of the merger, Jazz Semiconductor (Newport, Calif.) will become a subsidiary of Acquicor. Because Acquicor is a publicly traded company, privately-held Jazz Semiconductor will no longer pursue its planned initial public offering and will withdraw its registration statement filed with the U.S. Securities and Exchange Commission.
Amelio will continue in his role as the CEO and chairman of Acquicor, the parent company of Jazz. Hancock will continue to serve as the chief operating officer and president of Acquicor and Wozniak will continue to serve as its chief technology officer.
Shu Li, president and CEO of Jazz Semiconductor since 2002, will continue in his role.
Jazz Semiconductor is an independent wafer foundry primarily focused on specialty process technologies, including silicon-germanium (SiGe). In 2002, the company was initially formed as a joint venture between private-equity firm Carlyle Group and chip maker Conexant Systems Inc. (Newport Beach, Calif.).
At the time, Conexant spun-out Jazz, which had been part of Conexant's captive semiconductor operations. But since the spin-out, Jazz has struggled and lost money.
For the first six months of 2006, Jazz Semiconductor's unaudited adjusted revenue and adjusted EBITDA were $116.6 million and $13.8 million, respectively. For the first six months of 2006, Jazz Semiconductor's unaudited GAAP operating loss and unaudited net loss were $15.5 million and $15.4 million, respectively.
The unaudited operating loss of $15.5 million includes stock compensation expense, management fees to The Carlyle Group and Conexant that will be discontinued upon closing of the merger.
Amelio, however, was upbeat about the acquisition. "Jazz is poised to take advantage of growth opportunities for innovative specialty foundry services," he said in a statement.
Acquicor intends to fund the purchase price and its transaction costs and to provide additional capital for the growth and expansion of Jazz Semiconductor's business through a combination of cash in the trust account, and third party financing. Wachovia Capital Finance (Western) has provided a commitment letter for a $65 million credit facility for the merged entity. The selling shareholders have agreed to provide up to $80 million of seller financing to complete the transaction, if necessary.
Two chip makers Conexant and RF Micro Devices are separately set to benefit from the pending acquisition of Jazz Semiconductor Inc.