GigPeak, Inc. (NYSE MKT:GIG), a company built on judicious acquisitions, has decided to be acquired itself. Integrated Device Technology, Inc. (IDT; NASDAQ:IDTI) has agreed to buy the developer of communications semiconductors and optical components for $3.08 per share, or approximately $250 million, in an all-cash transaction.
The proposed offer represents a premium of approximately 22% to GigPeak's closing share price on February 10, 2017. Both boards have unanimously approved the terms of the merger agreement, and the directors of GigPeak will recommend that stockholders accept the offer. The companies expect the deal, which is not subject to a financing condition, to complete during the second calendar quarter of 2017.
GigPeak, formerly GigOptix, formed in 2007 when Dr. Avi Katz took over the former iTerra Communications (see ""). Katz then rolled up several companies to expand GigOptix's product line (see, for example, "GigOptix continues evolution with Helix acquisition" and "GigOptix to go public through merger with Lumera"). The company changed its name to GigPeak when it acquired Magnum Semiconductor last year (see "GigOptix to buy Magnum Semiconductor, change name to GigPeak Inc.").
Along the way, the company created a wide range of optical components while branching out into industries besides telecommunications, including video processing and military/aviation. It may be known best for its work in polymer-based technologies via its Thin Film Polymer on Silicon investigations (TFPS; see "GigOptix TFPS Mach-Zehnder modulators earn Telcordia qualification"). GigPeak created a joint venture with CPqD of Brazil, called BrPhotonics, to further commercialize TFPS products (see "GigOptix says silicon photonics order imminent for joint venture").
Concurrent with the acquisition announcement, GigPeak reported record revenues for both its fourth quarter ($16.2 million) and full year fiscal 2016 ($58.7 million).
IDT sees the pending acquisition as adding optical interconnect product and technology to complement its existing real-time interconnect products. The acquisition also should add approximately $16 million of quarterly revenue at 70% non-GAAP gross margin and be immediately accretive to earnings in the first full quarter following close, IDT expects.
"GigPeak is a recognized leader in high performance optical, RF, and video transport technology, and is a perfect fit for IDT. The products, technology, and culture of GigPeak all complement and represent an acceleration of our current strategy," said Gregory Waters, IDT president and CEO. "We gain an exceptional group of talented people and valuable intellectual property with the GigPeak team, and welcome them into one of the most innovative companies in the semiconductor industry."
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