Spansion acquires non-volatile memory provider Saifun for $368M
By Ann Steffora Mutschler, Senior Editor -- EDN, October 8, 2007
To consolidate all MirrorBit and NROM IP, design and manufacturing expertise into a single company, Sunnyvale, Calif.-based pure-play flash memory supplier Spansion Inc. is set to acquire non-volatile memory (NVM) IP provider Saifun Semiconductors Ltd. for $368 million.
Since 2002, Spansion has licensed Saifun’s NROM intellectual property (IP), which served as the cornerstone of Spansion’s MirrorBit technology, which now represents nearly one fourth of the NOR flash memory segment, and generates revenues at a run rate approaching $2 billion per year.
As part of this relationship, Saifun also provided design services to Spansion such as development of Spansion's MirrorBit Quad and SPI product families. By combining the two companies, Spansion said it can further accelerate the development of its next-generation product roadmap by directly leveraging more than 150 MirrorBit technology and design experts and eliminate its licensing and royalty payments to Saifun.
Further, Spansion said the combination will allow it to consolidate IP from Saifun that is complementary to its MirrorBit technology, license that technology and drive adoption of MirrorBit beyond the NOR segment into new markets including NAND, DRAM, and SoC.
This move also diversifies Spansion’s product roadmap with the addition of Saifun’s engineering team that is already familiar with MirrorBit technology, and expands Spansion’s operating margins.
Under terms of the agreement, each Saifun shareholder is to receive 0.7429 shares of Spansion common stock and approximately $5.05 per share in cash for each share of Saifun common stock; the cash distribution of which is to be funded solely from Saifun’s existing cash on hand concurrently or before the closing of the transaction.
Based on closing stock prices on Friday, October 5, the total consideration values Saifun at $11.26 per share, for a total consideration of $368 million on a fully-diluted basis, or approximately $135 million net of cash acquired and cash distributed to Saifun shareholders.
Boaz Eitan, CEO of Saifun said in a statement, “By combining Spansion MirrorBit expertise with our successful NROM IP licensing model, we will more rapidly enable our current and future customers to commercialize new generations of flash memory technology.”
Saifun said it will continue to support all of its existing licensees.
The boards of directors of both companies have approved the merger agreement, and following the close of the deal, Eitan will join Spansion’s board of directors.
Eitan, who together with his affiliates owns approximately 35 percent of Saifun outstanding shares, has entered into a voting agreement with Spansion and agreed to vote all of his shares in favor of the transaction. After the transaction, current Saifun shareholders will hold approximately 15 percent of Spansion’s shares.
The transaction is subject to customary closing conditions including Israeli court approval, regulatory approvals and Saifun shareholder approval. The companies expect the deal to close in Q1 2008.
