PHOENIX -- On Semiconductor Inc. here today announced that it intends to purchase Cherry Semiconductor Corp., the chip subsidiary of Cherry Corp. of Waukegan, Ill. The purchase price is $250 million in cash, subject to adjustment in certain circumstances. The transaction is expected to close in the second quarter of the year.
Based in East Greenwich, R.I., Cherry Semiconductor employs 970 people and has annual sales of approximately $130 million.
Cherry Semiconductor's portfolio of analog and mixed-signal ICs for the automotive,computing, and communications markets will complement those of On Semiconductor, the former Semiconductor Components Group of Motorola Inc., which was spun off last year.
Cherry's products include power management regulators, interface sensors, and switching and pulse-width modulated controllers.
"This acquisition is an important part of our strategic plans to become a leader in power management analog," said Steve Hanson, CEO and president of On Semiconductor. "Combining our engineering expertise and product portfolio will provide our customers increased design-in support, improved supply capability and innovative power management solutions. The
management teams of both companies are enthusiastic about the combination and the focus it will bring to meeting our customers' needs."
Peter Cherry, chairman and president of Cherry Corp., said the deal improved shareholder value for the company. "Significant resources will be unlocked as a result of the sale of Cherry Semiconductor, " he said. "The net proceeds from the sale will be redeployed into the higher
growth segments of our core markets of automotive switches and modules, computer keyboards, switches and controls, as well as into related growth markets. We undertook an extensive review of our strategic plans over the last several months and have identified a number of areas we would like to exploit. We will be actively pursuing our growth strategies in the near term future."
The transaction will be structured as a sale of all of the common stock of Cherry Semiconductor. The transaction is subject to certain terms and conditions, including Hart-Scott-Rodino filings and consents. The boards of directors of both companies have approved the stock purchase agreement and the related transaction.