Spansion to Acquire Saifun Semiconductor
Spansion and Saifun Semiconductors have announced that they have signed a definitive merger agreement for Spansion Inc. to acquire Saifun Semiconductors Ltd. This transaction consolidates all MirrorBit(R) and NROM IP, design and manufacturing expertise into a single company. As a result, the combination will expand Spansion's product portfolio, and enable Spansion's immediate entry into the technology licensing business, significantly expanding Spansion's market opportunity.
Under the terms of the agreement, each Saifun shareholder will receive 0.7429 shares of Spansion common stock and approximately $5.05 per share in cash for each share of Saifun common stock. The cash distribution will be funded solely from Saifun's existing cash on hand concurrently or before the closing of the transaction. Based on closing stock prices on October 5, the total consideration values Saifun at $11.26 per share, for a total consideration of $368 million on a fully-diluted basis, or approximately $135 million net of cash acquired and cash distributed to Saifun shareholders. The transaction is subject to satisfaction of customary closing conditions that include Israeli court approval, regulatory approvals and the Saifun shareholders' approval, and is expected to close in the first quarter of 2008.
"Throughout our long-term partnership with Saifun we have been impressed with the depth of technology expertise, the quality of people and the ingenuity of the Saifun organization and look forward to establishing a team in Israel," said Bertrand Cambou, president and CEO, Spansion Inc. "We look forward to collaborating with them to serve Saifun's existing licensees, and enter new markets with a powerful technology licensing strategy and a broadened and diversified product portfolio."
Since 2002, Spansion has been a licensee of Saifun's NROM intellectual property, which has formed the cornerstone of Spansion's proprietary MirrorBit technology. MirrorBit Technology now represents nearly one fourth of the entire NOR Flash memory segment, and generates revenues at a run rate approaching $2 billion per year. As part of this relationship, Saifun has also provided design services to Spansion, including the successful development of Spansion's MirrorBit Quad and SPI product families. By combining the two companies, Spansion can further accelerate the development of its next generation product roadmap by directly leveraging over 150 MirrorBit technology and design experts and also eliminate its own licensing and royalty payments to Saifun.
"Joining forces with Spansion enables us to take our licensing business to the next level," said Boaz Eitan, CEO of Saifun Semiconductor. "By combining Spansion MirrorBit expertise with our successful NROM IP licensing model, we will more rapidly enable our current and future customers to commercialize new generations of Flash memory technology. We will continue to support all of our existing licensees with the same commitment and dedication as before. We are certain that the addition of the Spansion IP and manufacturing know-how will only accelerate all programs."
The boards of directors of both companies have approved the definitive agreement. Following the close of the transaction, Dr. Boaz Eitan will become a member of Spansion's Board of Directors. Dr. Boaz Eitan, who together with his affiliates, owns approximately 35 percent of Saifun outstanding shares, has entered into a voting agreement with Spansion and agreed to vote all of his shares in favor of the transaction. After the transaction, current Saifun shareholders will hold approximately 15 percent of Spansion's shares.
