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IXYS expands portfolio with Zilog acquisition

Posted: 10 Dec 2009     Print Version  Bookmark and Share

Keywords:IXYS Zilog acquisition  power management  MCU 

IXYS Corp. has entered into a definitive agreement to acquire Zilog Inc. for $62.4 million (Rs.291.67 crore). Under the terms of the agreement, IXYS will acquire all of Zilog's outstanding common shares for $3.5858 (Rs.167.61) per share in cash. The acquisition is subject to the approval of Zilog shareholders and other customary closing conditions. The transaction is expected to be final during the quarter ending March 31, 2010.

The combination of the two companies with complementing technologies will allow IXYS and Zilog to leverage analogue power management with digital control. Zilog has a focused MCU business with technologies that will complement IXYS' product portfolio. IXYS has a broad based and diversified range of products geared towards industrial, telecommunications, medical, automotive, alternative energy and consumer applications. By introducing MCUs that enable digital power management and embedded control, IXYS will be able to create more cost-effective system integration solutions for its diversified customer base.

"As the world migrates towards SoCs, Zilog's core MCU technology along with IXYS' core power solutions create entirely new products that will meet the needs for today and tomorrow," said Federico Faggin, chairman of the board and the co-founder of Zilog.

"We are pleased with this strategic acquisition that will allow us to penetrate more applications in traditional and developing markets, leveraging both of our strengths. Digital power management is one of the fastest growing applications in the markets we serve. Zilog's 35-year history in MCUs with its legendary Z80 and Z8 architectures parallels IXYS' pioneering technologies in power MOSFETs, IGBTs and HVICs," commented Nathan Zommer, CEO and founder of IXYS. "With the expected rebound in MCU sales in 2010, we anticipate a growth in opportunities for refined power control in many applications; the acquisition and integration of this MCU business will strengthen our position and allow us to take advantage of these opportunities. We believe this transaction will create further value for our shareholders, employees and customers through a further expansion and diversification of our product offerings. As it is one of the pioneers of MCUs in Silicon Valley, we plan to keep the Zilog entity with its recognised and valued trademark."

"Zilog has actively explored a broad range of strategic alternatives to enhance shareholder value. The price that IXYS is proposing to pay is a premium to our current stock price, as well as a substantial premium to the average of the prices at which we've traded throughout 2009," said Darin Billerbeck, Zilog's president and CEO. "This acquisition brings liquidity to our shareholders, while increasing our financial stability in these continuing uncertain economic times."

IXYS expects to increase its penetration in the automotive electronic and electric market by producing cost-effective integrated product offerings, including the power semiconductors, driver ICs and Zilog MCUs that are essential for automotive controls and driving displays. In IXYS' prime industrial market, IXYS plans to deploy MCUs that are suited for motor control, power control and automation. In the telecommunications and security industries, Zilog's MCUs complement IXYS' ICs, which can be deployed in modems, VOIP, FIOS and automated alarm systems. For the medical market, the Zilog MCU platform complements IXYS' power and IC products in defibrillators, imaging and diagnostics. Additionally, the recently expanded IXYS products for LED lighting and display, which require digital power control, will benefit in the market from the availability of complementary MCUs. MCU product offerings will be expanded to include low-power and sensing technologies for energy management applications, including smart lighting and intrusion detection.

The acquisition will also allow IXYS and Zilog to pool R&D resources, leverage economies of scale, reduce manufacturing costs and streamline and integrate operational and support costs. Over time, the integration is expected to result in improved financial results for the combined organisation.





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