TOKYO & MILPITAS, Calif.–(BUSINESS WIRE)–Renesas to Acquire Intersil to Create the World’s Leading Embedded Solution Provider

Renesas

Renesas to Acquire Intersil to Create the World’s Leading Embedded Solution Provider

Companies Combine Leadership in Microcontroller/System-On-Chip and Precision Analog & Power to Accelerate Growth

Key Transaction Highlights:

  • Acquisition creates a highly synergistic, complementary product portfolio of system solutions targeted at large opportunities in the automotive, industrial, and IoT markets.
  • Complementary customers and geographic penetration are expected to create immediate opportunities for revenue growth.
  • US$22.50 per share in cash to be paid for all Intersil outstanding shares, representing a premium of approximately 43.9 percent over the unaffected price of Intersil’s common stock as of August 19, 2016.
  • The transaction is expected to be immediately accretive to pro-forma non-GAAP EPS (earnings per share) and free cash flows after closing.
  • Transaction will be financed with cash-on-hand.

TOKYO & MILPITAS, Calif.–(BUSINESS WIRE)–Renesas Electronics Corporation (“Renesas”, TSE: 6723), a premier supplier of advanced semiconductor solutions, and Intersil Corporation (“Intersil”, NASDAQ:ISIL), a leading provider of innovative power management and precision analog solutions, today announced they have signed a definitive agreement for Renesas to acquire Intersil for US$22.50 per share in cash, representing an aggregate equity value of approximately US$3.2 billion (approximately 321.9 billion yen at an exchange rate of 100 yen to the dollar). The transaction has been unanimously approved by the boards of directors of both companies. Closing of the transaction is expected in the first half of 2017, following approval by Intersil shareholders and the relevant governmental authorities.

“Intersil has been part of the industry’s evolution for many decades, carving out key niches and developing core technology that provides tangible benefits over competing solutions”

The acquisition combines two long-standing industry leaders in their respective segments. Together, Renesas’ and Intersil’s deep expertise across a number of state-of-the-art technologies and end markets will enable the combined company to become a complete solution provider of embedded systems to customers. By combining Renesas’ market-proven microcontroller (MCU) and system-on-chip (SoC) products and technologies and Intersil’s leading power management and precision analog capability, Renesas will be well positioned to address some of the most exciting opportunities in key areas such as automotive, industrial, cloud computing, healthcare, and the Internet of Things (IoT). Strong product synergy and complementary customer and regional exposure will enable a larger global footprint and increase Renesas’ ability to serve customer system requirements. The acquisition is also expected to expand Renesas’ product portfolio, particularly for analog devices, where the market is expected to increase by approximately US$3.9 billion by 2020.

Renesas anticipates near- and long-term revenue expansion opportunities combined with the modest anticipated cost efficiencies associated with greater scale will eventually generate synergies of US$170 million. The transaction is expected to immediately increase both gross and operating margins and be accretive to Renesas’ non-GAAP earnings per share and free cash flows after closing.

“Renesas is accelerating its focus of resources in automotive, industrial, infrastructure, and the rapidly growing IoT segments to aggressively grow its global business and maintain its position as a leading provider. Intersil’s extensive portfolio of analog and power devices as well as its strength in the automotive, industrial, and broad-based segments complement many of Renesas’ initiatives in these areas,” said Bunsei Kure, Representative Director, President and CEO of Renesas Electronics Corporation. “We believe that this compelling and complementary combination will bring significant synergies and cross selling opportunities as well as a system solution proposition which will pave the way for Renesas to strengthen its position as a leader in the global semiconductor market while delivering value to its customers with a unique product offering.”

“Intersil has been part of the industry’s evolution for many decades, carving out key niches and developing core technology that provides tangible benefits over competing solutions,” said Necip Sayiner, President, CEO and Director of Intersil Corporation. “As we’ve embarked on the most recent transformation over the last three years, we have honed the company’s core capabilities and focused them on areas where we are uniquely positioned to solve customer system challenges. The success of that strategy and the ability to improve the quality of the business is what has brought us to this next and exciting phase. We see great potential in combining the Intersil and Renesas portfolios and gaining the scale that will provide a platform for accelerated growth.”

BofA Merrill Lynch and Morgan Stanley acted as financial advisers to Renesas; Morrison Foerster acted as Renesas’ legal counsel; McKinsey & Company provided strategic advice to Renesas. JP Morgan acted as exclusive financial adviser to Intersil; Jones Day and Covington & Burling acted as Intersil’s legal counsel; Foros Group provided strategic advice to Intersil.

Investor Webcast

Intersil will be hosting an investor webcast on Tuesday, September 13, at 8:30am Pacific Time. The investor webcast can be accessed via the investor page of the Intersil website at http://ir.intersil.com, or by calling +1 (503) 343-6028 for international or (888) 656-8682 for the U.S., and using the passcode 81145163.

Additional Information and Where to Find It

This communication is being made in respect of the proposed transaction involving Intersil and Renesas. Intersil intends to file with the SEC a proxy statement in connection with the proposed transaction with Renesas as well as other documents regarding the proposed transaction. The definitive proxy statement will be sent or given to the stockholders of Intersil and will contain important information about the proposed transaction and related matters. INTERSIL’S SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement and other relevant materials (when they become available), and any other documents filed by Intersil with the SEC, may be obtained free of charge at the SEC’s website, at www.sec.gov. In addition, security holders of Intersil will be able to obtain free copies of the proxy statement through Intersil’s website, www.intersil.com, or by contacting Intersil by mail at Attn: Corporate Secretary, 1001 Murphy Ranch Road, Milpitas, California 95035.

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