Semiconductor Maker MACOM to Acquire Applied Micro for $770 Million

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MACOM Technology Solutions Holdings, Inc., a supplier of high-performance analog RF, microwave, millimeterwave and photonic semiconductor products, said Monday it has entered into a definitive agreement to acquire Applied Micro Circuits Corporation, a provider of Connectivity and Computing solutions for next-generation cloud infrastructure and Data Centers, for approximately $8.36 per share, consisting of $3.25 in cash and 0.1089 MACOM shares per share of Applied Micro.

The transaction is valued at approximately $770 million for Applied Micro’s approximately $165 million in TTM revenue (including the Compute business) and $82 million of cash and short-term investments at September 30, 2016.

MACOM intends to divest Applied Micro’s well-positioned Compute business within 100 days from closing the transaction, as the business does not strategically align with MACOM’s long-term focus, the company said.

Applied Micro has been exploring strategic options for the Compute business and there is known strategic interest among several potential buyers and investors, said MACOM.

MACOM will continue to support Compute customers and partners during this transition.

“This transaction will accelerate and expand MACOM’s breakout opportunity in Enterprise and Cloud Data Centers. MACOM will now be able to provide all the requisite semiconductor content for optical networks – analog, photonic and PHY – from the switch to fiber for long haul, metro, access, backhaul and Data Center,” said John Croteau, President and Chief Executive Officer at MACOM.

“ AppliedMicro’s 100G to 400G single-lambda PAM4 platform should perfectly complement MACOM’s leadership in analog and photonic components for Data Centers. Notably, the IEEE recently recommended the adoption of AppliedMicro’s single lambda PAM4 solution to be an industry standard for enterprise and Data Center connectivity, positioning this technology as the solution of choice going forward,” he added.

Evercore is exclusive financial advisor and Ropes & Gray LLP serves as legal counsel to MACOM.

Morgan Stanley & Co. LLC is exclusive financial advisor and Pillsbury Winthrop Shaw Pittman LLP serves as legal counsel to AppliedMicro.