Acquisition creates platform for addressing connectivity applications

29th March 2019
Posted By : Alex Lynn
Acquisition creates platform for addressing connectivity applications

It has been announced that ON Semiconductor and Quantenna Communications have entered into a definitive agreement for ON Semiconductor to acquire Quantenna for $24.50 per share in an all cash transaction. The acquisition consideration represents equity value of approximately $1.07bn and enterprise value of approximately $936m, after accounting for Quantenna’s net cash of approximately $136m at the end of fourth quarter of 2018.

The acquisition significantly enhances ON Semiconductor’s connectivity portfolio with the addition of Quantenna’s industry leading WiFi technology and software capabilities. 

Keith Jackson, President and Chief Executive Officer of ON Semiconductor, said: “We are very pleased to welcome Quantenna to ON Semiconductor’s team. The acquisition of Quantenna is another step towards strengthening our presence in industrial and automotive markets.

“The combination of ON Semiconductor’s expertise in highly efficient power management and broad sales and distribution reach, and Quantenna’s industry leading WiFi technologies and software expertise creates a formidable platform for addressing fast growing markets for low-power connectivity in industrial and automotive applications. I am very excited about the opportunity this acquisition creates for customers, shareholders, and employees of the two companies.”

Dr Sam Heidari, Chairman and Chief Executive Officer of Quantenna, added: “Today’s announcement is great news for Quantenna employees and customers worldwide. As part of ON Semiconductor, Quantenna will benefit from a world-class organisation in our commitment to providing the best end user experience for our customers.

“We are proud of our accomplishments and look forward to a smooth transition with the ON Semiconductor team to pursue exciting new opportunities for Quantenna’s talented employees and reinforce our longstanding position as a leading WiFi technology innovator.”

Following consummation, the transaction is expected to be immediately accretive to ON Semiconductor’s non-GAAP earnings per share and free cash flow, excluding any non-recurring acquisition related charges, the fair value step-up inventory amortisation, and amortisation of acquired intangibles. 

The transaction is not subject to a financing condition. ON Semiconductor intends to fund the transaction through cash on hand and available capacity under its existing revolving credit facility. 

Completion of the transaction is subject to approval by Quantenna’s stockholders, regulatory approvals and other customary closing conditions. The transaction has been approved by ON Semiconductor’s and Quantenna’s boards of directors and is expected to close in the second half of 2019. No approval of the stockholders of ON Semiconductor is required in connection with the proposed transaction.

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