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Gennum, Tundra ink acquisition agreement

Posted: 24 Mar 2009 ?? ?Print Version ?Bookmark and Share

Keywords:agreement definitive? Gennum acquisition Tundra? transaction acquire?

Gennum Corp. and Tundra Semiconductor Corp. have entered into a definitive agreement providing for the acquisition by Gennum of all of the issued and outstanding shares of Tundra. The transaction, which is valued at approximately Cdn $86 million ($69.6 million), adds new digital switch and bridge products and functionality to Gennum and builds on Gennum's growth strategy of extending its high-speed signal integrity expertise and solutions to a broader set of markets.

The transaction is expected to result in a number of benefits for the combined business. The purchase price payable by Gennum for each Tundra common share will be, at the election of the holder, Cdn$4.43 in cash or 1.1575 common shares of Gennum or a combination thereof, subject to pro ration.

Based on 19,326,053 Tundra current outstanding common shares, in aggregate, a total of $55 million cash and 8.0 million common shares of Gennum will be issued to holders of Tundra common shares. Based on Gennum's five-day volume weighted average share price on the Toronto Stock Exchange ending on March 18, the total consideration values Tundra at Cdn$4.43 per share, a 48 percent premium to Tundra's volume weighted average share price on the Toronto Stock Exchange over the same period.

"Through the acquisition of Tundra, Gennum is positioned to achieve its strategic and financial objectives more quickly and accelerate the development of highly differentiated, high-speed interconnect and signal integrity products," said Franz Fink, president and CEO of Gennum.

Gennum anticipates that when completed, the transaction will augment Gennum's global sales and channel network, and will enable Gennum to leverage Tundra's customer relationships in high-growth regions such as Asia and China. Gennum also expects that the acquisition of Tundra will strengthen and accelerate Gennum's technology and product development effort by expanding R&D resources, and combining critical high-speed mixed signal and advanced digital design talent.

"We believe that the acquisition of Tundra will create a much stronger combined company, capable of expanding the served markets and applications for our products," said Daniel Hoste, president and CEO of Tundra.

Gennum expects that cash synergies of approximately $10 million can be realized following the completion of the transaction beginning in the current fiscal year resulting from increased efficiencies in all areas of operations. The acquisition is anticipated by Gennum to be accretive to earnings this fiscal year, excluding one-time costs.

The combined portfolio and capabilities of the Gennum and Tundra offerings are expected to deliver highly differentiated high-speed mixed-signal and interconnect products that capture a greater portion of the silicon content in wireless, wireline infrastructure, industrial, medical, server and storage equipment. Furthermore, by leveraging Gennum's advanced high-speed interconnect IP, Gennum believes it can more quickly bring to market new products that support industry-pervasive protocols such as PCI Express, Serial ATA/SAS, USB, DisplayPort, HDMI, 10Gbit Ethernet, Fibre Channel, SONET and RapidIO.

"We believe that this is a true win-win for both Tundra and Gennum customers," Fink added.

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