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MERGERS & ACQUISITIONS
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Standard Microsystems will not up its bid for Conexant

The Newport Beach-based firm has received what it calls a 'superior proposal' from Golden Gate Capital.

By Kristen SchottPublished: February 23, 2011 09:59 AM

Standard Microsystems Corp. (SMSC) does not plan to raise its bid to buy Conexant Systems – a move that could lead to a San Francisco-based private equity firm's acquisition of the Newport Beach semiconductor maker.

SMSC in January had entered into a deal to purchase Conexant for $2.25 per share. But Conexant has since received a $2.40 per share offer from an affiliate of Golden Gate Capital, which it deemed "superior."

“While we believed that SMSC's acquisition of Conexant would have provided for a highly complementary combination of our businesses, we have elected not to pursue the merger at a higher premium as we believe that our offer for the Conexant business was fully valued,” said Christine King, president and CEO of SMSC.

New York-based SMSC develops connectivity technology found in personal computers, autos and portable devices, among other uses. Conexant's semiconductors are found in imaging, audio, embedded modem and video surveillance applications.

If Conexant accepts Golden Gate Capital's proposal, SMSC will receive a termination fee of $7.7 million.

“SMSC’s organic business remains healthy and our long-term growth objectives are intact," said King. "We are excited about our design-win activity and product roadmaps and are confident in our ability to drive profitable future revenue growth as a standalone business. Going forward, we remain focused on leveraging our close customer relationships and intellectual property to promote our customers’ success and, ultimately, to deliver value to our shareholders.”

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