MaxLinear buys Exar in $700m deal
RF and mixed-signal IC vendor MaxLinear of Carlsbad, Calif has agreed to buy analogue, power and mixed-signal IC vendor Exar 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 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.
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