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onsemi switches Synaptics acquisition to 123 dollars a share in cash

onsemi and Synaptics revised their merger agreement after an unsolicited competing proposal. The buyer will pay 123 dollars in cash for each Synaptics share, valuing the transaction at about 5.7 billion dollars. Completion awaits the remaining approvals; the companies expect it in mid-2027, if shareholder approval and remaining regulatory reviews are completed. Financing is already committed.

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Cash replaces the June stock agreement

onsemi, a developer of power and sensing technologies, changed its agreement to buy Synaptics on 1 October. The semiconductor companies now put the acquisition at approximately 5.7 billion dollars, with Synaptics shareholders receiving 123 dollars in cash for each share. The amendment followed an unsolicited competing proposal from a third party whose identity was not disclosed. The original merger agreement had been signed on 25 June.[1], [2]

Synaptics’ board reviewed the revised terms with financial and legal advisers and unanimously concluded that the agreement was in the interests of the company and its shareholders. Chief executive Rahul Patel said the cash structure gave shareholders certainty about the value they would receive. The companies had valued the previous agreement at approximately 7 billion dollars.[1]

The June agreement would have exchanged each Synaptics share for onsemi shares. The October amendment replaces that fixed exchange ratio with a cash payment, changing the form of consideration offered to shareholders.[2]

onsemi keeps committed financing behind the purchase

The purchase is to be funded with cash on hand and committed financing. onsemi said it had secured fully committed debt financing from Morgan Stanley. Obtaining financing is not a condition for completion under the amended agreement. The companies still expect the transaction to be completed in mid-2027, subject to Synaptics shareholder approval, required regulatory approvals and other customary conditions. The US Federal Trade Commission has approved the deal, while reviews by regulators in other jurisdictions remain outstanding.[1]

Management expects earnings gains after completion

onsemi chief executive Hassane El-Khoury said the revised deal was expected to increase earnings per share immediately upon completion on a non-GAAP basis, which excludes specified items from standard accounting measures. He also said the company had identified opportunities beyond the previously announced 200 million dollars of annual synergies. Additional gains from revenue growth and bringing some Synaptics production in-house are expected after the first 18 months following completion. Synaptics’ products include processors for artificial intelligence at the edge, wireless connectivity and touch, display and biometric sensing. These products accompany onsemi’s power and sensing technologies in the planned combination.[1]

References

  1. News sourceonsemionsemi and Synaptics Announce Revised Merger Agreement↩1↩2↩3↩4
  2. News sourceFinanceFeedsonsemi changes Synaptics acquisition to cash↩1↩2
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