Littlefuse (LFUS 170.72, -7.54, -4.2%) is the world leader in circuit protection with growing global platforms in power control and sensing. Today, the company announced a deal to acquire IXYS Corp. (IXYS 21.80, +5.85, +36.7%), a pioneer in the development of power semiconductors, solid state relays, high voltage integrated circuits, and microcontrollers, which is going to increase its presence in the semiconductor industry.
The transaction carries an equity value of approximately $750 million and an enterprise value of $655 million. This is the largest acquisition in Littlefuse's 90-year history and it equates to an offer of $23.00 per share for IXYS shareholders, which is a 44% premium over Friday's closing price.
Under the terms of the deal, IXYS shareholders can elect to receive either $23.00 per share in cash or 0.1265 of a share of Littlefuse common stock, which is currently trading near an all-time high.
Excluding acquisition an integration related costs, Littlefuse expects the transaction to be immediately accretive to adjusted earnings per share and free cash flow in the first full year after the acquisition closes. Moreover, it is thought Littlefuse can achieve more than $30 million of annualized cost savings within the first two years after closing.
The acquisition of IXYS will provide Littlefuse with a springboard to increase its penetration of the automotive markets and will result in a company with annual revenues of approximately $1.5 billion. In 2016, Littlefuse reported revenues of $1.06 billion.
Pending the necessary approvals, the transaction is expected to close in the first calendar quarter of 2018.