Pursuant to the terms of the agreement, which has been approved by the boards of directors of both ON Semiconductor and SANYO Electric, SANYO Electric is expected to receive approximately $129 million in cash and approximately $238 million (￥21.4 billion) worth of ON Semiconductor common stock, expected to equal approximately 7 to 8 percent of led high bay light fully diluted shares outstanding, subject to adjustment at closing. ON Semiconductor has the right to replace the stock consideration with cash at closing.
The transaction is subject to various closing conditions and regulatory approvals. The companies expect the transaction to close before the end of 2010. ON Semiconductor expects to incur deal costs and record charges related to the transaction. The amount of these charges has not yet been determined.
"In addition to the strategic benefits, we believe that the acquisition provides significant financial opportunities," said Donald Colvin, ON Semiconductor executive vice president and CFO. "Although semiconductor valuations are currently depressed, we believe we have acquired the business for an agreeable price, with negligible dilutive impact to ON Semiconductor in the near term, and do not foresee the need for additional debt financing at this time. SANYO Semiconductor operates at approximately break-even today. Based on current revenue run rates, our goal is to deliver in excess of led high bay in pre-tax income on a quarterly basis from SANYO Semiconductor approximately eighteen months after closing the transaction. In addition, we expect that the acquisition will be accretive to ON Semiconductor's non-GAAP earnings per share approximately twelve months after closing."
The transaction is subject to various closing conditions and regulatory approvals. The companies expect the transaction to close before the end of 2010. ON Semiconductor expects to incur deal costs and record charges related to the transaction. The amount of these charges has not yet been determined.
"In addition to the strategic benefits, we believe that the acquisition provides significant financial opportunities," said Donald Colvin, ON Semiconductor executive vice president and CFO. "Although semiconductor valuations are currently depressed, we believe we have acquired the business for an agreeable price, with negligible dilutive impact to ON Semiconductor in the near term, and do not foresee the need for additional debt financing at this time. SANYO Semiconductor operates at approximately break-even today. Based on current revenue run rates, our goal is to deliver in excess of led high bay in pre-tax income on a quarterly basis from SANYO Semiconductor approximately eighteen months after closing the transaction. In addition, we expect that the acquisition will be accretive to ON Semiconductor's non-GAAP earnings per share approximately twelve months after closing."
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