5 January 2004 Camarillo, CA Lightwave -- Vitesse Semiconductor Corp. has announced a definitive agreement to acquire all of the outstanding equity interests of Cicada Semiconductor Corp. for approximately $66 million in cash. The transaction is subject to customary closing conditions--including the approval by Cicada's stockholders--and is anticipated to close in the first calendar quarter of 2004.
Vitesse expects this transaction to be neutral to its pro-forma earnings per share in the first half of calendar 2004 and to be slightly accretive in the second half. In connection with this transaction, Vitesse expects to record certain acquisition-related charges, the timing and magnitude of which have not yet been determined. Vitesse expects the Cicada products to contribute about $10 million in revenues in calendar 2004, with a majority to be realized in the second half of the year as customers upgrade their 10/100-Mbit/sec networks to Gigabit Ethernet speeds. It is also expected that by the time the transaction closes, Cicada will have reduced its workforce to approximately 40 employees; most will be engaged in product development activities.
"This is a natural combination for both companies," contends Lou Tomasetta, president and chief executive officer of Vitesse. "Vitesse and Cicada have been jointly selling Gigabit speed switch solutions for over a year, comprised of Vitesse's LAN switches and Cicada's Gigabit Ethernet copper transceivers. The combined companies will now offer best in class switches with the highest levels of integration and the lowest power gigabit transceivers. We expect this acquisition to double our revenues in the LAN switch market and to position us to gain share as the market embraces Gigabit switch products."
"We are thrilled to be joining forces with Vitesse," adds David McLean, president and chief executive officer of Cicada. "We have had a successful business relationship with them and look forward to combining our engineering teams to capture a substantial share of the emerging gigabit ethernet LAN market."
Cicada is a supplier of DSP-based integrated circuit solutions to developers of high-speed communications systems used in LANs. Cicada's advanced Digital Signal Processing and System-on-Chip design technologies enable affordable, Gigabit-per-second digital communications throughout the Internet's infrastructure over ubiquitous copper cable installations and legacy fiber-optic links. Cicada's LAN IC products include transceivers and advanced System-on-Chip solutions for Gigabit Ethernet networks and backplanes. Cicada was founded in 1996 and is headquartered in Austin, TX.