SAN JOSE, Calif. - Conexant Systems Inc. is going private.
Investment firm Golden Gate Capital has agreed to purchase all of the outstanding shares of Conexant's common stock at a price of $2.40 per share in cash. The transaction is expected to close in the second quarter of calendar 2011. Conexant, which is public, will soon go private.
Conexant also announced that it has terminated its previously announced agreement with Standard Microsystems Corp. and paid to SMSC the $7.7 million termination fee provided for under that agreement.
As previously announced, Conexant entered into a definitive agreement on Jan. 9, 2011, to be acquired by SMSC for $284 million. Under the plan, Conexant stockholders would receive for each share of Conexant common stock $1.125 in cash and a fraction of a share of SMSC common stock equal to $1.125 divided by the volume weighted average price of SMSC common stock for the 20 trading days ending on the second trading day prior to closing, but in no event more than 0.04264 nor less than 0.03489 shares of SMSC common stock.
On Jan. 18, 2011, Conexant said that it received an unsolicited, written proposal from a private equity firm, Golden Gate Private Equity Inc., to acquire all of the outstanding shares of Conexant's common stock at a price in the range of $2.35 to $2.45 per share in cash.
On Feb. 21, Golden Gate has narrowed the price for Conexant to $2.40 per share. Newport Beach, Calif.-based Conexant is evaluating that bid.
On Feb. 21, the board of directors of Conexant informed SMSC that it had determined that a proposal from Golden Gate Capital to acquire Conexant constituted a “superior proposal” as such term is defined in the existing merger agreement. If Conexant terminates the merger agreement to accept the proposal from Golden Gate Capital, SMSC will be entitled to a termination fee of $7.7 million.
On Wednesday (Feb. 23), SMSC said it does not plan to increase its offer for Conexant Systems Inc. above $2.25 per share in response to a proposal from Golden Gate Capital. SMSC also announced that it has agreed to waive the “match period” under the merger agreement.
Hopefully painful days of Conexant are over since they again go to private with strong investors behind. They sold out all valuable business lines which disturbed reputation and trust of company towards clients also caused lots of highly educated/experienced employee lost. Again hopefully its over besides as @daleste said, real good way to make money from nothing for smsc.
As ex-Conexant employee, I am happy to see that Conexant float as an independent company. Considering the Company once valued close to 100 billion, it is sad to see entire company sold with such low value. I feel Conexant long time CEO Dwight Deck should take major responsibility for that.
This augurs well for Conexant in way, though it is sad to see the developments. They are widely popular for on modem ICs and have had good business but not really making it to the big league.
I feel they didn't innovate much in these tough times so sort of faded into the background.
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