By Lisa Kerner
Charlotte, N.C., May 20 - Tower Semiconductor Ltd. agreed to acquire Jazz Technologies, Inc. in a stock-for-stock deal valued at $169 million, including net debt.
Each outstanding share of Jazz common stock will be converted into the right to receive 1.8 Tower ordinary shares, according to a joint company news release.
A $1.2 million termination fee is included in the agreement, it was reported in an 8-K filing with the Securities and Exchange Commission.
The transaction values Jazz's fully diluted equity value at approximately $40 million, based on Tower's closing price on May 19.
Both companies' boards of directors have unanimously approved the transaction, which is slated to close in the second half of 2008.
"The acquisition of Jazz is an excellent strategic fit for Tower - it creates economies of scale which allows for improved margins and strongly complements our specialty process offering, transforming us into the leading specialty pure-play foundry," Tower chief executive officer Russell Ellwanger said in the release.
"We are excited about the potential of joining together with Tower and believe Jazz's shareholders, customers, employees and other stakeholders will benefit from the enhanced growth, profitability and cash flow prospects of the combined company," Jazz chief financial and administrative officer Paul Pittman added.
Tower, a Migdal Haemek, Israel, independent specialty wafer foundry, was advised by Citi.
UBS Investment Bank advised Jazz.
Jazz is the parent company of Jazz Semiconductor, Inc., an independent wafer foundry based in Newport Beach, Calif.
| Acquirer: | Tower Semiconductor Ltd.
|
| Target: | Jazz Technologies, Inc.
|
| Announcement date: | May 20
|
| Transaction total: | $169 million
|
| Price per share: | 1.8 shares of Tower Semiconductor
|
| Termination fee: | $1.2 million
|
| Expected closing: | Second half of 2008
|
| Stock price of acquirer: | Nasdaq: TSEM: $1.16 on May 19
|
| Stock price of target: | Amex: JAZ: $0.85 on May 19
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
