Renesas to Acquire Integrated Device Technology for $6.7 Billion

Renesas and Integrated Device Technology have signed a definitive agreement under which Renesas will acquire IDT for US $49.00 per share in an all-cash transaction representing an equity value of approximately US$6.7 billion (approximately 733.0 billion yen). The acquisition combines two recognized leaders in embedded processors and analog mixed-signal semiconductors, each with unique strengths in delivering products to improve performance and efficiency in high-computing electronic systems. The boards of directors of both companies have unanimously approved the transaction. Closing of the transaction is expected to occur in the first half of 2019, following approvals by IDT shareholders and the relevant regulatory authorities.

Since 2016, Renesas has been executing its growth strategy to thrive in the global marketplace and become a global leading embedded solution provider. As part of this initiative, Renesas is working to expand its analog solution lineup and to strengthen its kit solution offerings that combine its microcontrollers (MCUs), system-on-chips (SoCs) and analog products. These efforts will be underpinned by revenue growth in its focus domains: automotive segment, which is expected to see tremendous growth with autonomous driving and EV/HEV; industrial and infrastructure segments, which are expected to advance with Industry 4.0 and 5G (fifth-generation) wireless communications, as well as the fast-growing IoT segment. Renesas views accretive acquisitions as key enablers in achieving this growth strategy to deliver further incremental growth. The completion of the Intersil Corporation acquisition in February 2017 enabled Renesas to add industry-leading power management and precision analog capabilities to its product portfolio. Renesas is capitalizing on the exciting opportunities in its focus business segments by offering combined solutions. The transaction announced today further accelerates Renesas’ growth strategy, bringing substantial strategic and financial benefits.

The acquisition will provide Renesas with access to a vast array of robust analog mixed-signal capabilities in embedded systems, including RF, advanced timing, memory interface & power management, optical interconnect, wireless power, and smart sensors. The combination of these product lines with Renesas’ advanced MCUs and SoCs and power management ICs enables Renesas to offer comprehensive solutions that support the increasing demand of high data processing performance. The enriched solution offerings will bring optimal systems from external sensors through analog front-end to processors and interfaces.

IDT’s analog mixed-signal products for data sensing, storage and interconnect are key devices that support the growth of data economy. Acquisition of these products enables Renesas to extend its reach to fast-growing data economy-related applications including data center and communication infrastructure, and to strengthen its presence in the industrial and automotive segments.

Key Transaction Highlights:

  • Acquisition of analog mixed-signal company adds complementary product lines, supporting Renesas’ growth strategy
  • IDT’s analog mixed-signal products including sensors, high performance interconnect, RF & optical and wireless power join Renesas’ MCUs, SoCs and power management ICs to deliver comprehensive solutions addressing the increasing demand from IoT to big data processing
  • IDT’s products for memory interconnect and specialized power management enable Renesas to create growth in expanding data economy fields and to further strengthen its presence in the industrial and automotive segments
  • US$49.00 per share in cash to be paid for all IDT outstanding shares, representing a premium of approximately 29.5 percent over the unaffected price of IDT’s common stock as of August 30, 2018
  • The transaction is expected to be highly accretive to Renesas’ pro-forma non-GAAP gross margin, non-GAAP EPS (earnings per share) and free cash flows immediately after closing
  • Renesas plans to finance the transaction with cash reserves and approximately 679.0 billion yen of bank loans. There will be no issuance of additional share capital for this transaction.

everything RF had reported this acquisition on Sept 5th, however there was no confirmation or announcement from the company on this. Click here to read the article.

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