Montage Technology will Purchase Pericom in $430 mn Deal


Published Date : Sep 30, 2015

Montage Technology Group Ltd, in china, the biggest analog chip-maker said it has offered to purchase the deal with Pericom Semiconductor Corp at around $430 million. The offer bumped up from Diodes Inc in the beginning of this month. 

The chip-maker’s premium is stood at 9.5% to Pericom. It is an all-cash offer to the company at around $18.50 per share and close of $16.90. 

On the other hand, Pericom’s shares jumped 7.3% to $18.14 in the pre-market affair trading earlier on Wednesday. This increase in shares makes Pericom one of the most robust companies in the world. It makes its timing, connectivity, and power management in regards to the chip making one of the leading statures of the company. These chips are used in cars, telecom networks, and many other devices. 

According to a statement by Montage, the company had received signed commitments from China Electronics Corp. and Bank of China. They are the principal shareholder of the company when it comes to dealing in finance. 

The chip-maker has also offered Pericom to pay a reverse break-up fee of around 5% of the overall deal’s equity value. This is based on the fact if the transaction does not close up either within the estimated five business days or fails to win the regulatory approval. 

Nevertheless, Montage said it would pay a break-up fee of around $15 mn to the diodes on behalf of Pericom. 

Diodes Inc., proposed to purchase Pericom earlier this month. This proposal was in a deal valued at nearly $400 mn to aggravate its analog and various mixed-signal chip businesses.  

Montage has Barclay’s as its financial adviser, while O’Melveny and Myers LLP is its legal counsel.