Create continued growth with a portfolio that generates $8.2 billion in revenue, expanding the scale and diversity of the business.
Increase domain expertise and expand engineering capabilities to develop more complete solutions to our clients’ complex problems and challenges.
It is expected to be accretive to free cash flow at closing, boost adjusted earnings per share (EPS) within 18 months of closing, and realize cost synergies of $275 million by the end of the second year.
Analog Devices, Inc. and Maxim Integrated Products, Inc. announced on July 13 that they have reached a definitive agreement for Analog Devices to acquire Maxim in an all-stock transaction with a combined company market value of more than $68 billion. The boards of directors of both companies have unanimously approved the transaction. The transaction will strengthen ADI’s leadership in analog semiconductors by expanding the breadth and scale of its business in multiple attractive end markets.
Under the terms of the agreement, upon closing of the transaction, shareholders of Maxim common stock will receive 0.630 shares of ADI common stock for each share. After the transaction closes, ADI’s current shareholders will own approximately 69% of the combined company, while Maxim shareholders will own approximately 31%. The transaction is intended to qualify for a tax-exempt restructuring under U.S. federal income tax law.
ADI President and CEO Vincent Roche“Today, we are making an exciting announcement with Maxim, explaining the next step in ADI’s vision to bridge the real and digital worlds. Both ADI and Maxim are committed to solving the complex problems of our customers, and together we will further Expand the breadth and depth of technology and talent to enable the development of more complete leading-edge solutions. Maxim is a prestigious signal processing and power management company with a proven technology portfolio and an impressive history of design innovation. Our strong Join forces to work together to deliver the next wave of growth in the semiconductor industry while creating a healthier, safer and more sustainable future for all.”
Tunç Doluca, President and CEO of Maxim Integrated“For more than three decades, we’ve held on to our belief that we continue to innovate and develop high-performance semiconductor products to help our customers invent. In the future, I’m very excited to work with Analog Devices to continue to push the boundaries of technology and go beyond what’s possible.” Both of our companies have deep engineering expertise and a strong culture of innovation. Together, we will build a stronger industry leader, delivering exceptional value for our customers, employees and shareholders.”
Following the transaction, two Maxim directors will join ADI’s board of directors, including Maxim President and CEO Tunç Doluca.
Compelling strategic and financial case
An industry leader in expanding global business: The merger strengthens ADI’s leadership in the analog semiconductor market and, on the pro forma, is expected to reach $8.2 billion in revenue and $2.7 billion in free cash flow. Maxim’s strength in the automotive and data center markets complements ADI’s strength across a broad range of industrial, communications and digital healthcare markets and is set to drive key long-term growth trends. In power management, Maxim’s application-focused product portfolio complements ADI’s broad-market product portfolio.
Extensive domain knowledge and technical capabilities: The integration of best-in-class technologies will further strengthen ADI’s domain expertise and engineering capabilities, spanning from DC to 100 Ghz, from nanowatts to kilowatts, and from sensors to the cloud, covering more than 50,000 products. The combined company can provide more complete solutions, serve more than 125,000 customers, and capture opportunities in a target market totaling $60 billion3.
A common philosophy of innovation-led growth: Both parties have similar corporate cultures that value talent, innovation and engineering excellence, with a total of more than 10,000 engineers and an annual R&D investment of nearly $1.5 billion. The combined company will continue to attract top engineering talent in various fields.
Revenue growth and cost savings: Adjusted EPS is expected to increase gradually over the 18 months following closing due to lower operating expenses and COGS, with cost synergies reaching $275 million by the end of the second year. By the end of the third year after the deal closes, manufacturing process optimization is expected to bring additional cost synergies.
Strong financial strength and cash flow capability: ADI expects the combined company to have a stronger balance sheet, with an estimated net leverage close to 1.2×4. The transaction is also expected to bolster free cash flow at closing, generating more returns for shareholders.
timing and approval
The transaction is expected to close in summer 2021, subject to the satisfaction of closing conditions, including regulatory approvals in the U.S. and outside the U.S. and approval by shareholders of both companies.
About Analog Devices
Analog Devices, Inc. is the world’s leading high-performance analog technology company dedicated to solving the toughest engineering design challenges. With outstanding detection, measurement, power, connection and interpretation technology, build intelligent bridges between the real and digital worlds, thereby helping customers to re-understand the world around them.
About Maxim Integrated
Maxim Integrated develops innovative analog and mixed-signal products and technologies that make systems smaller and smarter while enhancing their safety and energy efficiency. We help our customers with innovative designs in automotive, industrial, health, mobile consumer and cloud data centers, providing industry-leading solutions that make the world a better place.
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