Analog Devices To Buy Hittite Microwave For Enterprise Value Of $2 Bln

(RTTNews) - Analog Devices, Inc. (ADI), a provider of high-performance semiconductors for signal processing applications, and Hittite Microwave Corp. (HITT) Monday said the two companies have entered into a definitive agreement for ADI to acquire Hittite for $78 per share in cash.

This agreement reflects a total enterprise value of about $2 billion for Hittite, which is a manufacturer of high performance integrated circuits, modules, subsystems and instrumentation for RF, microwave and millimeter wave applications. The closing price of Hittite's common stock on June 6, 2014 was $60.56 per share.

ADI expects to fund the acquisition through a combination of cash on hand and short-term debt financing.

The Boards of Directors of both companies have approved the transaction, which is expected to close near the end of ADI's third fiscal quarter of 2014.

The transaction is expected to be accretive to ADI's adjusted earnings per share.

Vincent Roche, ADI President and CEO, said, "Hittite's strength in RF, microwave, and millimeter wave technology complements ADI's RF and signal conversion expertise. Our combined capabilities will enable us to bring more complete solutions to our customers and address more of the industrial, communications infrastructure, and automotive markets."

Credit Suisse acted as exclusive financial advisor to Analog Devices, and WilmerHale was its legal advisor.

Deutsche Bank acted as exclusive financial advisor to Hittite while Foley Hoag was its legal advisor.

ADI also reaffirmed its financial guidance for the third quarter. The firm expects revenue to increase in the range of 1 to 5 percent, and adjusted earnings per share to be in the range of $0.60 to $0.64.

While announcing the second-quarter results in late May, ADI said it expects revenue to be up 1 to 5 percent sequentially, implying revenue of $701.49 million to $729.27 million.

On average, 27 analysts polled by Thomson Reuters project the company to earn $0.63 per share for the quarter. Analysts' estimates typically exclude special items. Wall Street looks for revenue of $716.09 million for the third quarter.

ADI closed up 0.2 percent on Friday at $52.69. HITT, which closed up 0.3 percent at $60.56, climbed 28.8 percent in pre-market trading.