Renesas Electronics Corporation and Integrated Device Technology (IDT) have signed an agreement today for Renesas to acquire IDT for $49.00 per share in an all-cash transaction representing an equity value of approximately $6.7 billion.
The acquisition combines two known giants in embedded processors and analog mixed-signal semiconductors, each with unique strengths in delivering products to improve performance and efficiency in high-computing electronic systems. Closing of the transaction is expected to occur in the first half of 2019, following approvals by IDT shareholders and the relevant regulatory authorities.
“The combination of Integrated Device Technology’s analog mixed-signal leadership with Renesas’ world-leading microcontroller and automotive/industrial franchise creates a new global powerhouse,” said Gregory L. Waters, President and CEO of IDT. “The Combined company will possess the key capabilities that customers in the modern data economy demand.”
Since 2016, Renesas has been executing its growth strategy to become a leading embedded solution provider. As part of this initiative, Renesas is working to expand its analog solution lineup and to strengthen its kit solution offerings that combine its microcontrollers (MCUs), system-on-chips (SoCs) and analog products. These efforts will be underpinned by revenue growth in its focus domains: automotive segment, which is expected to see tremendous growth with autonomous driving and EV/HEV; industrial and infrastructure segments, which are expected to advance with Industry 4.0 and 5G (fifth-generation) wireless communications, as well as the fast-growing IoT segment. Renesas views accretive acquisitions as key enablers in achieving this growth strategy to deliver further incremental growth.
The completion of the Intersil Corporation acquisition in February 2017 enabled Renesas to add industry-leading power management and precision analog capabilities to its product portfolio. Renesas is capitalizing on the exciting opportunities in its focus business segments by offering combined solutions. The transaction announced today further accelerates Renesas’ growth strategy, bringing substantial strategic and financial benefits.
Complementary products expand Renesas’ solution offerings
The acquisition of IDT will provide Renesas with access to a vast array of robust analog mixed-signal capabilities in embedded systems, including RF, advanced timing, memory interface & power management, optical interconnect, wireless power, and smart sensors. The combination of these product lines with Renesas’ advanced MCUs and SoCs and power management ICs enables Renesas to offer comprehensive solutions that support the increasing demand of high data processing performance. The enriched solution offerings will bring optimal systems from external sensors through analog front-end to processors and interfaces.
“IDT’s products combined with our MCUs, SoCs and power management ICs will enable Renesas to widen its product offerings as well as to expand its reach into areas such as the growing data economy-related space,” said Bunsei Kure, Representative Director, President and CEO of Renesas.
IDT’s analog mixed-signal products for data sensing, storage and interconnect are key devices that support the growth of data economy. Acquisition of these products enables Renesas to extend its reach to fast-growing data economy-related applications including data center and communication infrastructure, and to strengthen its presence in the industrial and automotive segments.
Renesas anticipates near- and long-term revenue growth from expanded opportunities and access to fast-growing industries, and cost savings from a greater scale business platform to bring innovation and improvements with an expected financial impact of approximately over $250 million.