Skyworks Solutions To Buy PMC-Sierra For $2 Bln In Cash - Quick Facts

(RTTNews) - Skyworks Solutions Inc. (SWKS) said that it agreed to acquire PMC-Sierra Inc. (PMCS) for $10.50 per share in an all-cash transaction valued at about $2 billion.

The purchase price represents a 37 percent premium to the close of PMC's stock as of October 5, 2015.

The Boards of Directors of each company have approved the transaction, which is expected to close in the first half of calendar 2016, subject to PMC shareholder approval, receipt of regulatory approvals and other customary closing conditions.

Skyworks said it intends to fund the acquisition with cash on hand from the combined companies and with new, fully-committed debt financing. The closing of the transaction is not subject to financing conditions.

Upon completion of the acquisition, Skyworks expects annual revenues of more than $4 billion with gross margin in the 55 percent range and operating margin exceeding 40 percent.

Excluding any non-recurring acquisition-related charges and amortization of acquired intangibles, Skyworks expects the acquisition to be immediately accretive to non-GAAP earnings post-closing and will finalize estimates of the transaction's financial impact as well as the accounting for the transaction upon deal close.

" Financially, we expect this transaction to create further economic value for our shareholders upon closing, with immediate margin expansion and accretion. After we implement $75 million of synergies, we expect at least $0.75 of incremental non-GAAP diluted earnings per share on an annual basis," said David J. Aldrich, chairman and chief executive officer of Skyworks.

Based on preliminary results, Skyworks expects to deliver approximately $880 million in revenue and $1.52 of non-GAAP earnings per share for the fourth quarter of fiscal 2015.

Analysts polled by Thomson Reuters expect the company to report earnings of $1.51 per share and revenues of $876.03 million for the fourth-quarter. Analysts' estimates typically exclude special items.