AUDIO semiconductor-maker Wolfson Microelectronics has agreed a £291m takeover by Texas rival Cirrus Logic.
Announced yesterday, the cash deal will see Wolfson’s shareholders receive 235p per share, a 76 per cent premium to the share’s value prior to the deal.
The valuation still marks a significant drop from Wolfson’s peak in 2006 when the Edinburgh-based firm held a market capitalisation of £630m due to booming sales of Apple’s iPod which it supplied audio chips for.
“We believe this reflects the hard work that Mike Hickey (Wolfson’s chief executive) and his team have put into building Wolfson as a leader in the supply of high performance Audio Hubs and MEMS microphones to the consumer electronics market,” said chairman Michael Ruettgers.
“Together with Cirrus Logic, we believe this will create a powerful platform for future growth, above and beyond our standalone potential.”
Analysts supported the deal, Numis analyst Nick James said: “This looks fair given that Wolfson has sustained multiple challenges in recent years. While it seemed likely that it could improve from the perfect storm of 2013, it was becoming somewhat unclear how it could transform itself into a sustainable profitable business (customer concentration at Samsung was an ongoing issue).”
Wolfson also reported first quarter results showing slightly lower than expected revenue at $28.8m (£17.11m), down from $48.1m during the same period last year. Underlying losses rose to $4.5m during the quarter.
BEHIND THE DEAL
JP MORGAN CAZENOVE | RUPERT SADLER
1 Rupert Sadler joined the bank in January 2006, the Cambridge graduate previously worked at NM Rothschild & Sons and became managing director in JP Morgan’s telecoms, media and technology team within its corporate finance division.
2 Last year he advised Cable & Wireless Communications on the $750m sale of its business in Macau to Chinese state-owned operator Citic. He previously worked on deals including Cineworld’s £47.3m purchase of boutique movie theatre owner Picture House.
3 On the Cirrus Logic deal Sadler was joined by long-time colleague Dwayne Lysaght and Madhu Namburi on the JP Morgan Cazenove team, which operated as Wolfson Microelectronics’ sole financial adviser and joint corporate broker.
Wolfson Microelectronics was also supported by Charlie Lytle from Citigroup as joint corporate broker. Harry Chathli and Claire Norbury from Luther Pendragon advised Wolfson on PR for the deal. Cirrus Logic received financial advise from Goldman Sachs from a team including Tammy Kiely, Colin Ryan and Nick Harper. Helen Ridgway acted as PR adviser to Cirrus from AxiCom.