MaxLinear to buy Exar for $700 million

April 09, 2017 // By Peter Clarke
Consolidation continues in the semiconductor industry with two US mixed-signal IC companies coming together to create economies of scale.

RF and mixed-signal IC vendor MaxLinear Inc. (Carlsbad, Calif.) has agreed to buy analog and mixed-signal IC vendor Exar Corp. (Fremont, Calif.) for $700 million, or $472 million net of Exar's cash acquired. The price of $13.00 for each Exar share represents a 22 percent premium over Exar's closing price of $10.62 on Tuesday, March 28.

At the same time the purchase agreement was announced both companies reaffirmed their guidance for upcoming quarterly revenue. MaxLinear’s calendar first quarter 2017 revenue is expected to be in the range of $86 million to $90 million while Exar's fiscal fourth quarter 2017 revenue is expected to be in the range $27.2 million to $28.2 million.

MaxLinear said it would finance the deal by borrowing $425 million and using the cash available on the two companies balance sheets.

Kishore Seendripu, CEO of MaxLinear, described the two companies as "complementary" and praised Exar's power management and interface ICs in particular. Both companies had previously been acquiring other companies but Exar's previous CEO Lou DiNardo stepped down after three years in the job and having "rebooted" the company.

Exar started out in 1971 as a wholly-owned subsidiary of Rohm Co. Ltd. to serve as an IC design vehicle and to provide Rohm with access to Silicon Valley technology and expertise. Rohm made the decision to divest Exar in 1984 although it bailed the company out in the late 1980s. Rohm finally ended its ownership of Exar in 1994.

The transaction is expected to close in the second quarter of 2017, subject to customary closing conditions and U.S. regulatory approvals.

Related links and articles:

www.maxlinear.com

www.exar.com

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