Orange County Business Journal

Microsemi Wraps Up Zarlink Deal

Chris Casacchia Thursday, October 13, 2011

Aliso Viejo-based Microsemi Corp. on Thursday completed its $633 million buy of Canadian chipmaker Zarlink Semiconductor Inc., finalizing a rare hostile deal.

The transaction ends a testy courtship and marks the only hostile takeover in the chip sector since 2000, according to New York-based Capital IQ, a unit of a Standard & Poor’s.

Zarlink had rejected three of Microsemi’s earlier bids and urged its shareholders to oppose the takeover, which was first announced nearly three months ago.

The deal appeared to be losing steam as a Sept. 22 deadline neared on Microsemi’s earlier $547 million offer. Microsemi boosted its bid by 19%, to $3.98 per share.

The Zarlink buy puts Microsemi on a clear path to reaching its goal of $1 billion in annual revenue and joining the upper ranks of the mixed-signal chip market.

Microsemi could also challenge Newport Beach-based Jazz Semiconductor Inc., part of Israel’s Tower Semiconductor Ltd., for the No. 2 position among local chipmakers.

Irvine-based Broadcom Corp., with about $6.8 billion in annual revenue, is the biggest local chipmaker.

The deal is Microsemi’s largest to date and provides the company inroads in the communications and medical markets—two key segments in its growth plan.

Microsemi's shares closed up about 2% Thursday to a market value of about $1.6 billion.