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ON Semiconductor Corp. has agreed to acquire specialty chipmaker Amis Holdings Inc. in an all-stock deal worth nearly $915 million, the companies said Thursday, Dec. 13. Pocatello, Idaho-based Amis, is backed by Francisco Partners and Citigroup Venture Capital Equity Partners, who acquired nearly 80% of the company in 2000 in a deal that gave the target an enterprise value of more than $525 million. The pair pumped in $280 million in equity. Amis went public in 2003 and both Francisco and CVC held a 23% stake ahead of a secondary offering in March. Terms of Thursday's deal call for Amis shareholders to receive 1.15 shares of ON Semi, valuing the target's shares at $10.14 based on the buyer's closing share price Wednesday of $8.82 per share. ON Semi plans to issue nearly 104 million common shares on a fully diluted basis to complete the deal. Amis shares ended trade down 0.5% at $7.35 apiece Wednesday. Amis designs and makes chips for the auto, medical and military markets, which ON Semi president and CEO Keith Jackson said would complement its own existing automotive and industrials business. Amis counts among its customers General Electric Co., Hewlett-Packard Co. and Medtronic Inc. A former unit of GA-TEK Inc., a subsidiary of Japan Energy Electronic Materials Inc., Amis is the parent company of Ami Semiconductor Inc. "The acquisition of Amis furthers the transformation of ON Semiconductor into an analog and power solutions leader with enhanced scale, higher value and higher margin products, deep customer relationships and an expanded addressable market," Jackson said in the statement. Both boards have approved the deal, which is subject to approval from both companies' shareholders, customary closing conditions and regulatory approval. The transaction is expected to close in the first half of 2008. Once that happens, ON Semi shareholders will own 74% of the combined entity while Amis shareholders will hold the balance. ON Semi also said Thursday it would expand its share repurchase program to 50 million from 30 million, effectively enabling it to buy back half of the shares issued in the deal over the next three years. ON Semi's CFO Donald Colvin said the company foresees up to $50 million in pre-tax savings in 2009, expects the deal will add to earnings per share at the end of 2008, while it may record a one-time charge after the deal closes. Together, the companies have had revenues of more than $2 billion in last 12 months and Ebitda of more than $500 million for the same period, he noted. Jackson will remain president of the combined company, whose headquarters will remain in Phoenix. Amis CEO Chris King will join a newly expanded, eight-member board of directors. On Semi turned to Credit Suisse Securities (USA) LLC as exclusive financial adviser and DLA Piper US LLP as counsel on the deal. Goldman, Sachs & Co. was exclusive financial adviser to Amis, while Davis Polk & Wardwell was counsel.  Deal Video
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