Chipmaker Standard Microsystems Corp. is folding in a brief contest to acquire Newport Beach-based Conexant Systems Inc., which now appears set to sell for $282 million to a San Francisco private equity firm.
Hauppauge, N.Y.-based chipmaker Standard Microsystems said it doesn’t plan to increase its $270 million January offer for Conexant.
Standard, a maker of chips for chips for computer products, networking devices, portable electronics and industrial gear, is set to get a breakup fee of $7.7 million.
Conexant is set to sell to Golden Gate Private Equity Inc. after the private equity firm’s February offer was deemed a “superior proposal” earlier this week by Conexant’s board.
The deal is expected to close in the second quarter.
Golden Gate’s buyout offer includes debt held by Conexant, which had a recent market value of about $200 million.
Conexant makes chips for multifunction office printers, digital picture frames, PC speakers and other devices and has annual revenue of $200 million.
Going Private
The buyout is set to take Conexant private and end the company’s 12-year run as a public company.
Conexant got its start as the chip unit of now defunct aerospace contractor Rockwell International Corp., which had its headquarters in Seal Beach and later Costa Mesa.
It spun off from Rockwell in 1999 and spawned a handful of other chip companies in the area.
Conexant had a couple of years of robust growth and once was seen as a rival to the area’s biggest chipmaker, Irvine’s Broadcom Corp.
At Conexant’s peak, before the tech bust, it had a market value of about $13 billion.
The company 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.
Conexant also had a hand in the creation of Woburn, Mass.-based Skyworks Solutions Inc., which has operations in Irvine.
Skyworks was born when Conexant spun off its wireless chip business and combined it with Alpha Industries Inc. in 2002.
Former CEO
Golden Gate’s offer for Conexant comes with a twist: a former chief executive at the chipmaker who was ousted a few years back.
Dan Artusi, who led Conexant for about nine months until early 2008, is an operating executive at Golden Gate.
Industry watchers believe Artusi spearheaded Golden Gate’s offer based on his knowledge of Conexant.
At Golden Gate, Artusi is “focused on semiconductor and communications investment opportunities,” according to the company’s website.
Dwight Decker—Conexant’s former chief executive who led the company for nearly all of its life since spinning off from Rockwell—recruited Artusi.
Artusi left Conexant in what some said was a clash with Decker and other directors over the pace of restructuring.
Decker left Conexant’s board last year.
Artusi came to Conexant after two years as chief executive of Austin, Texas-based ColdWatt Inc., a maker of electronics that convert power from wall outlets for use in computers.
Before that, Artusi spent four years at Austin chip designer Silicon Laboratories Inc., including a year as chief executive.
He joined Silicon Laboratories in 2001 from what now is Freescale Semiconductor Inc., a Motorola Inc. spinoff in Austin.
For most of Artusi’s career, he was with Motorola Inc.’s chip division, serving as vice president and general manager of various units.
An Argentina native, Artusi currently serves on the board of Santa Clara’s Atheros Communications Inc., which is being acquired by San Diego-based Qualcomm Inc.
Leadership?
It’s unclear what Conexant’s leadership would look like under Golden Gate, or if the firm would put Artusi back in charge.
Conexant President Sailesh Chittipeddi had been set to run the business as part of Standard and head up global engineering and product lines as an executive vice president.
Chief Executive Scott Mercer, who’s led a restructuring of Conexant that drew buyout interest, is expected to step down.
