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The Deal: Microsemi Pays $230M for Symmetricom

Tickers in this article: MSCC SYMM

NEW YORK (TheStreet) ¿¿ Microsemi said late Monday it would acquire Symmetricom in a $230 million deal that would boost the chipmaker's position as a vendor of timing products for the aerospace, defense and industrial markets.

Terms of the deal call for Aliso Viejo, Calif.-based Microsemi to pay $7.18 per share in cash for Symmetricom, a premium of 51% over the target's Monday close. The deal includes a provision allowing Symmetricom to shop for better offers through Nov. 8, and also would allow for Microsemi to either match a superior offer or receive a termination fee of between $5.05 million and $10.4 million.

Symmetricom, of San Jose, is a maker of highly-precise timekeeping and frequency technologies. The company's products are used in GPS satellites, national time references, power grids and in military and civilian networks. Microsemi, which specializes in making semiconductors that consume less power, said that the deal would allow it to offer customers a full range of timing chips.

"The acquisition of Symmetricom will create the largest and most complete timing portfolio in the industry today," Microsemi CEO James J. Peterson said. "From source to synchronization to distribution, Microsemi will offer an end to end timing solution for an expanded range of markets, driving increased dollar content opportunity and revenue growth."

Symmetricom CEO Elizabeth Fetter said Microsemi has the scale "to accelerate the adoption of the company's innovative new chip scale atomic clock technology into broader markets."

Microsemi said that the deal, which it expects will close in its quarter ending Dec. 29, 2013, should contribute at least 22 cents to earnings per share in the first year.

Jefferies is acting as financial adviser to Symmetricom and will assist the company during its go-shop window, with Latham & Watkins providing legal advice. Microsemi was advised by Morgan Stanley and O'Melveny & Myers.

Written by Lou Whiteman in New York