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Microchip Technology announced its agreement to acquire Standard Microsystems Corporation (SMSC) on May 2, 2012, and completed the $37-per-share cash acquisition on August 2, 2012. The deal valued SMSC at about $939 million in equity; Microchip put its enterprise value at about $766 million after subtracting SMSC’s cash and investments.
When did Microchip acquire SMSC?
The companies announced the definitive agreement on May 2, 2012. The merger closed on August 2, 2012, after U.S. and international antitrust reviews; Microchip reported receiving China’s clearance on July 31. At closing, SMSC became a wholly owned Microchip subsidiary, and trading in SMSC stock ceased.
The agreement had been signed on May 1, 2012, by Microchip, SMSC and Microchip Technology Management Co., according to the SEC Form 8-K.
How much did Microchip pay for SMSC?
Microchip agreed to pay $37.00 in cash for each SMSC share. The companies described the transaction as approximately $939 million in equity value. Microchip’s stated enterprise value was approximately $766 million, calculated after excluding roughly $173 million in SMSC cash and investments. Equity value and enterprise value are different measures; the latter accounts for the acquired company’s cash and investments in this stated calculation.
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What did SMSC make?
SMSC developed smart-connectivity and mixed-signal products for embedded applications. Its portfolio connected devices and systems across several markets, including automotive, industrial, computing, consumer electronics and wireless audio.
- USB connectivity: USB products and hub integrated circuits.
- Automotive networking: MOST technology, used for networking in vehicles.
- Wireless audio: Kleer and JukeBlox technologies.
- Embedded system products: system control and thermal-management solutions.
- Touch sensing: RightTouch capacitive-sensing technology.
Why did Microchip buy SMSC?
Microchip said the acquisition would broaden its smart-connectivity offerings for embedded markets and complement its embedded-control business. CEO Steve Sanghi described SMSC’s smart mixed-signal connectivity solutions for embedded applications as “an ideal complement” to Microchip’s business.
The deal also brought in an established business: Microchip reported that SMSC had net sales of $412 million for the fiscal year ended February 29, 2012, with a 54.4% non-GAAP gross margin and non-GAAP operating profit equal to 12% of sales. These are figures Microchip reported in 2012, not current financial results.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Which SMSC products remain visible in Microchip’s catalog?
Microchip’s maintained SMSC page directs visitors to current automotive USB products, USB hub ICs, MOST technology and capacitive-touch sensors. This shows where parts of SMSC’s connectivity portfolio remain represented in Microchip’s product catalog; it does not establish that every legacy SMSC product or brand is still sold.
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