Analog Devices to Buy Hittite Microwave in $2 Billion Deal

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By Reuters | Updated: 9 June 2014 18:56 IST
Chipmaker Analog Devices Inc said it would buy Hittite Microwave Corp in a deal valued at $2 billion to strengthen its radio frequency (RF) and signal conversion chip offerings.

Analog will pay $78 per share in cash, which represents a premium of 28.8 percent to Hittite's Friday close of $60.56 per share.

"Hittite's strength in RF, microwave, and millimeter wave technology complements (Analog's) RF and signal conversion expertise," Analog Chief Executive Vincent Roche said in a statement.

The company, which makes chips that help translate pressure, temperature and sound into digital signal, said it expected to fund the acquisition through cash on hand and short-term debt.

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(Also see: IISc partners with Analog Devices for MEMS and nanotech research)

The deal is expected to close by the end of the third quarter.

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Hittite had cash and short-term investments of $492.4 million and no debt as of March 31, according to Thomson Reuters data.

Analog also reaffirmed its revenue and adjusted profit forecast for the third quarter ending August.

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The company forecast an adjusted profit of 60-64 cents per share. Analog said it expected revenue to rise by 1-5 percent from the second quarter, which translates into $701.4 million-$729.2 million.

Analysts on average were expecting revenue of $716.09 million on a profit of 63 cents per share, according to Thomson Reuters I/B/E/S.

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Credit Suisse was Analog's financial adviser for the deal, while Deutsche Bank advised Hittite.

Hittite's shares rose about 29 percent to $78 in premarket trading on Monday. Analog's shares closed at $52.69 on the Nasdaq on Friday.

© Thomson Reuters 2014

 

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Further reading: Analog Devices, Hittite, Telecom
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