| HOME | NEWS ALERTS |
Conexant,
GlobespanVirata to Merge in $969.5 Million Deal
The combined company will target the broadband digital market, including digital-subscriber line connectivity and wireless local-area networking.
"Together, we will have the scale and scope to make the necessary [research and development] investments for continued innovation leadership in wired and wireless communications and multimedia applications for the digital home," said Dwight W. Decker, Conexant's chairman and chief executive, in a prepared statement.
Conexant, based in Newport Beach, Calif., is a semiconductor company, with key products in digital subscriber line and cable modem solutions. GlobespanVirata, of Red Bank, N.J., is a provider of broadband communications products.
The deal, approved by the boards of both companies, is expected to close in the first quarter of 2004.
Under the definitive agreement, GlobespanVirata shareholders will receive 1.198 shares of Conexant for each share held. Conexant will own 62.75% of the combined company, with GlobespanVirata holding the remaining 37.25% stake.
Based on Conexant's Friday closing of $5.84 a share, GlobespanVirata is valued at about $7 a share, a 14% premium to the company's Friday closing price. As of Sept. 30, GlobespanVirata has about 138.5 million shares outstanding.
Mr. Decker will take on the role as chairman of the combined company, while GlobespanVirata's president and chief executive, Armando Geday, will assume the post of CEO. Matthew Rhodes, Conexant's president, was named president of the combined company.
The combined company, which will employ about 2,400 people, will keep the Conexant name, but have its headquarters in Red Bank, N.J., GlobespanVirata's current home.
Both companies reported quarterly results last Thursday. For its fiscal fourth quarter ended Sept. 30, Conexant swung to a profit of $37.2 million, and revenue jumped 24% to $164.7 million. GlobespanVirata posted a slightly wider net loss of $31.3 million for its third quarter, hampered by several items. The company's quarterly revenue, however, doubled to $98.8 million.