ON Semiconductor acquiring Quantenna with $1b cash bid
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In a major business manoeuvre, ON Semiconductor has announced the acquisition of Quantenna Communications.
The two have entered into a definitive agreement with ON Semiconductor set to acquire Quantenna for US$24.50 per share in an all-cash investment. The acquisition consideration represents equity value of approximately $1.07 billion and enterprise value of approximately $936 million, after accounting for Quantenna's net cash of approximately $136 million at the end of fourth quarter of 2018.
ON Semiconductor president and chief executive officer Keith Jackson says the move will significantly enhance the company’s connectivity portfolio with the addition of Quantenna’s WiFi technology and software capabilities.
''We are very pleased to welcome Quantenna to ON Semiconductor's team. The acquisition of Quantenna is another step towards strengthening our presence in industrial and automotive markets. The combination of ON's expertise in highly efficient power management and broad sales and distribution reach, and Quantenna's industry-leading Wi-Fi technologies and software expertise creates a formidable platform for addressing fast-growing markets for low-power connectivity in industrial and automotive applications,'' Jackson.
''I am very excited about the opportunity this acquisition creates for customers, shareholders, and employees of the two companies.''
Following consummation, the transaction is expected to be immediately accretive to ON Semiconductor's non-GAAP earnings per share and free cash flow, excluding any non-recurring acquisition-related charges, the fair value step-up inventory amortisation, and amortisation of acquired intangibles.
The transaction is not subject to a financing condition. ON Semiconductor intends to fund the transaction through cash on hand and available capacity under its existing revolving credit facility.
''Today's announcement is great news for Quantenna employees and customers worldwide. As part of ON Semiconductor, Quantenna will benefit from a world-class organisation in our commitment to providing the best end-user experience for our customers,'' says Quantenna chairman and chief executive officer Dr Sam Heidari.
''We are proud of our accomplishments and look forward to a smooth transition with the ON Semiconductor team to pursue exciting new opportunities for Quantenna's talented employees and reinforce our longstanding position as a leading Wi-Fi technology innovator.''
Completion of the transaction is subject to approval by Quantenna's stockholders, regulatory approvals and other customary closing conditions. The transaction has been approved by ON Semiconductor's and Quantenna's boards of directors and is expected to close in the second half of 2019.