Newport Beach chipmaker Conexant Systems Inc. is being acquired for $284 million.
Hauppauge, N.Y.-based Standard Microsystems Corp. is buying Conexant, offering nearly 20% more than what the company was worth before the deal was announced.
Standard is paying cash and stock for Conexant and assuming debt.
It’s Standard Microsystems’ second acquisition here since November, when it acquired Laguna Niguel-based chip startup Symwave Inc. for undisclosed terms.
Last year, Standard Microsystems invested in Symwave with an initial $5 million investment that included an option to buy the company.
The Conexant buy is expected to close in the first half. It’s unclear what will happen to Conexant’s Newport Beach headquarters, which employs about 250 people.
Conexant makes chips for multifunction office printers, digital picture frames, PC speakers and other devices.
It has yearly sales of about $200 million.
Standard Microsystems makes chips for disk drives, keyboards, Universal Serial Bus ports, networking devices, portable electronics and industrial uses.
It has yearly sales of about $400 million.
The sale caps a turnaround effort at Conexant since the 2008 arrival of Chief Executive Scott Mercer.
In the past two years, Conexant has reworked debt, sold stock and debt, sold a chunk of land near its headquarters and done a handful of patent sales.
Mercer’s also nixed underperforming products, shed units that weren’t profitable or growing and made small buys to get into markets set to grow.
Wall Street seems to like the deal.
“From a Conexant shareholder perspective, we believe this deal is fair, and we do not expect any topping bids,” Blayne Curtis, an analyst at Jefferies & Co., said in a research note. “We see the synergies in several of the end markets including PC, security,and imaging as well as in technology.”
The move helps Conexant gain scale and resources to grow, according to Mercer.
“In our industry, size and scope provide a significant advantage with customers and suppliers,” he said. “Standard Microsystems and Conexant share similar core competencies in analog and mixed-signal design, possess complementary product portfolios, and count many customers in common.”
Mercer isn’t likely to stay on after the deal closes. Conexant is set to be run as a unit by Sailesh Chittipeddi, Conexant’s president and operations chief. He is set to report to Standard Microsystems’ Chief Executive Christine King with and executive vice president title.
Conexant got its start as the chip unit of aerospace contractor Rockwell International Corp.
The company spun off from Rockwell in 1999 and went on to spin off Newport Beach’s Mindspeed Technologies Inc. in 2003 and Newport Beach’s Jazz Semiconductor Inc. in 2002.
In 2008, Jazz was bought by Israel’s Tower Semiconductor Ltd. for $170 million.
