Microsemi Corp.’s $632 million buy of Canadian rival Zarlink Semiconductor Inc. is a rarity for chipmakers, according to New York-based Capital IQ, a unit of a Standard & Poor’s.
The market data provider crunched numbers from 1,451 mergers and acquisitions among publicly traded technology companies in the U.S. and Canada since 2000 and found that only 43, or about 3%, were considered unsolicited, or “hostile.”
Of those, only 12, or 28%, were completed.
None were for chipmakers.
Taking a broader look at the entire public-company sector, hostile takeovers remain a fairly infrequent strategy. Most suitors reach a deal with a company’s board or management rather than seeking shareholder approval.
Of the 192 bids in the public company sector so far this year, only 40 were considered hostile, according to market tracker FactSet Research Systems Inc. of Norwalk, Conn.
In 2010, only 43 of the 299 public bids were unfriendly, about 14%.
Microsemi’s breakthrough didn’t come easy.
Zarlink had rejected three of Microsemi’s earlier bids and urged its shareholders to oppose the takeover.
Microsemi boosted its winning offer for Zarlink’s shares by 19% to $3.98 per share, up from its initial offer of $3.35 a share.
Outstanding debt and Zarlink’s $107 million in cash accounted for the rest of the value of the deal, which comes to a 15% premium over Microsemi’s prior cash offer of $547 million.
Perhaps the highest profile hostile takeover attempt in Orange County was staged by Irvine-based chipmaker Broadcom Corp. in 2009 when it tried unsuccessfully to acquire Costa Mesa-based Emulex Corp., which makes electronics for data storage networks.
Ingram Expands in Canada
Santa Ana-based Ingram Micro Inc., the biggest distributor of computers, software and other technology products, is expanding its physical security division in Canada.
The ramp-up includes a hiring push, added sales support, and more technical training for resellers to market and sell physical security solutions to existing and potential customers.
A big part of the strategy in Canada is educating sales representatives, according to senior sales manager Jennifer Harmon.
“The Canadian physical security business unit will add a new skill set for the channel as well as provide a new revenue channel for many businesses,” she said.
The unit is based in Ontario, Canada, and employs a handful of people.
Ingram’s second-quarter revenue for its North American operations, which includes Canada, hit $3.76 billion, up 6% from a year ago. That’s the most second-quarter sales in more than a decade.
The North American region accounted for 43% of Ingram’s $8.75 billion in revenue for the period, up 7% from a year earlier.
The company recently overcame a system integrations glitch in Australia that hurt its operations there and soured earnings the last two quarters.
Ingram is undergoing a systems overhaul in each of the 26 countries it has operations in. It has concluded the upgrades in seven countries including Singapore, New Zealand, Chile, the Netherlands, Belgium and Indonesia.
The six-year software overhaul, geared to improve automation, operations and services for customers and global partners, is expected to be completed in 2014.
Ingram is the largest public company based in Orange County, with nearly $35 billion in sales in 2010.
It runs on the slimmest of profits and nets pennies on the dollar.
Analysts on average are forecasting profits in the September quarter of $69.2 million on revenue of $8.9 billion.
Ingram is slated to report earnings in late October.
Latisys’ Luau
Denver-based data storage provider Latisys Corp. received a warm welcome last month when it opened a 93,000-square-foot building at 17400 Von Karman Ave.
A Hawaiian-themed grand opening drew a crowd of more than 500, including sponsors and Irvine Mayor Sukhee Kang.
“Latisys’ grand opening was a welcomed event for Orange County-based companies looking to expand IT growth plans,” said Tom Panarisi, Western regional vice president for Latisys.
The company recently concluded construction on the first phase of the building: some 38,000 square feet of rentable space, which adds to a 50,000-square-foot building it occupies nearby.
The company now has more local space than any other data center operator here.
Tenants have leased about 22,000 square feet of the new space, executives said.
Latisys wouldn’t identify the anchor tenant but said it’s one of the largest chipmakers in Orange County.
The other tenants include: Toshiba America Information Systems Inc. in Tustin; Cypress-based Mitsubishi Electric & Electronics USA Inc.; First Foundation Bank in Irvine, the county’s fifth-largest savings and loan based on deposits; and Los Angeles-based apparel company Guess? Inc.
When the renovation of the new building concludes, Latisys will have about 150,000 square feet of space to lease to customers here.
Latisys spent more than $18 million for a 13-year lease and to gut and upgrade the building in the first of three phases for the project. The total tab for the upgrades and rent will likely come to between $50 million to $60 million when all three phases are completed.
Privately held Latisys sees about $70 million in yearly revenue.
