Diodes Inc. to Acquire BCD Semiconductor
Diodes Incorporated and BCD Semiconductor Manufacturing Limited, incorporated in the Cayman Islands, have signed an agreement where Diodes Inc. plan a merger and acquire BCD.
Diodes Incorporated is a global manufacturer and supplier of application specific standard products within the broad discrete, logic and analogue semiconductor markets. BCD is an analogue integrated device manufacturer.
Highlights of the transaction include:
Combined trailing twelve months reported revenue of approximately $750 million with significant cross-selling opportunities;
Expected to be immediately accretive to Diodes' GAAP earnings per share;
Strengthens Diodes' analogue product portfolio by expanding its standard linear and power management offerings;
Broadens Diodes' presence in Asia through BCD's strong local market position in China;
Enhances market and margin expansion opportunities by leveraging Diodes' cost-effective manufacturing and packaging capabilities;
Expands design and manufacturing capabilities for increased capacity and scale; and
Expected to result in revenue, operating and cost synergies.
At the effective date of the merger, each American Depository Share, which represents six ordinary shares of BCD, will be converted into the right to receive $8 in cash, without interest. The aggregate consideration will be approximately $151 million.
The boards of both companies have approved the transaction, which is still subject to approval by BCD's shareholders, as well as other customary closing conditions and regulatory approvals. The transaction is expected to close late in the first quarter of 2013 or early in the second quarter.
Commenting on the transaction, Keh-Shew Lu, President and Chief Executive Officer of Diodes, states, "This proposed acquisition underscores Diodes' strategy to expand our market and growth opportunities through select strategic acquisitions. This transaction will greatly enhance our analogue product portfolio by expanding our standard linear and power management offerings, including AC/DC and DC/DC solutions for power adapters and chargers, as well as other electronics products. BCD's established presence in Asia with a particularly strong local market position in China offers Diodes even greater penetration of the consumer, computing and communications markets."
"Similarly, Diodes can achieve increased market penetration for BCD's products by leveraging our global customer base and sales channels. In addition, BCD has in-house manufacturing capabilities in China, as well as a cost-effective development team that can be deployed across multiple Diodes' product families. We will also be able to apply Diodes' packaging capabilities and expertise to BCD's products in order to improve cost efficiencies, utilisation as well as product mix," adds Lu.
He concludes, "Diodes has a successful track record of combining businesses to achieve revenue expansion, cost reductions and improved profitability. BCD employees are a key asset, and we look forward to integrating them into the Diodes family as we work closely with our customers to familiarise them with our new expanded offerings, while continuing to provide exceptional service and support."
Commenting on the proposed acquisition, Chieh Chang, Chief Executive Officer of BCD Semiconductor, says, "We are pleased to have reached this agreement because we believe that BCD Semiconductor becoming a part of Diodes represents a compelling opportunity for our customers, employees and shareholders. This transaction provides liquidity at a significant premium for our shareholders and the combined company greatly strengthens the analog offerings and market opportunities for our customers."
Atlas Technology Group LLC and Duff & Phelps LLC acted as financial advisors and Sheppard Mullin Richter & Hampton LLP acted as legal counsel to Diodes Incorporated. RBC Capital Markets LLC acted as exclusive financial advisor and Covington & Burling LLP acted as legal counsel to BCD Semiconductor.
