Microsemi Corporation

Microsemi Corporation

September 01, 2011 14:16 ET

Microsemi Affirms Premium Offer to Zarlink Shareholders of CAD $3.35 Per Share

- Tender Offer Currently Open with Expiration September 22, 2011

ALISO VIEJO, CALIFORNIA--(Marketwire - Sept. 1, 2011) - Microsemi Corporation (NASDAQ:MSCC), a leading provider of semiconductor solutions differentiated by power, security, reliability and performance, commented on the directors' circular issued earlier today by Zarlink Semiconductor Inc. ("Zarlink" or "the Company").

"There is nothing in Zarlink's circular that would lead us to conclude there is additional value in the company that was not understood by us, or the market, prior to our bid. The board has again failed to provide its shareholders with a compelling reason to reject Microsemi's attractive all cash offer," said James J. Peterson, Microsemi's president and chief executive officer.

"Since we made our first public proposal on July 20, the global equity markets have experienced significant volatility, with wild gyrations driving the Philadelphia Stock Exchange Semiconductor Index down by 10 percent. This environment only serves to reinforce the attractiveness of our offer which delivers immediate liquidity, certainty and a 40 percent premium to the pre-bid value of Zarlink's shares. The offer of CAD $3.35 per share is firm, and despite what Zarlink suggests, our financing commitment is firmly in place, unaffected by recent market volatility."

Continued Peterson, "Six weeks after initiating a strategic review process (and over three months after retaining its financial advisors on May 24), Zarlink's board has still not disclosed any alternative to our cash offer. Amidst the backdrop of this difficult macroeconomic environment and stock market volatility, we believe that Zarlink's shareholders should carefully consider Microsemi's offer and tender their shares before it expires on September 22, 2011. Our cash offer remains the only actionable proposal."

Offer Details

On August 17, 2011 Microsemi announced that 0916753 B.C. ULC (the "Offeror"), an indirect wholly-owned subsidiary of Microsemi, had formally commenced its offers (the "Offers") to acquire all of the outstanding common shares, together with associated rights (the "SRP Rights") outstanding under the shareholder rights plan of Zarlink Semiconductor Inc. ("Zarlink"), and all of the outstanding 6 percent unsecured, subordinated convertible debentures maturing on September 30, 2012 of Zarlink. The Offeror delivered its Offers and take-over bid circular (together, the "Circular") to Zarlink's principal office and file the Circular with the Canadian securities regulators and the U.S. Securities and Exchange Commission.

Pursuant to the Offers, shareholders of Zarlink will be entitled to receive CAD $3.35 for each common share validly deposited and debentureholders of Zarlink will be entitled to receive CAD $1,367.35 per CAD $1,000 principal amount of the convertible debentures validly deposited plus accrued and unpaid interest to the date such debentures are taken up.

The Offers represent a 40 percent premium over the closing price of Zarlink's common shares on the TSX on July 19, 2011, the last trading day prior to the announcement of Microsemi's proposal to acquire the common shares, and a 24 percent premium over the closing price of the debentures of Zarlink on the Toronto Stock Exchange (TSX) on the same day. The Offers also represent a premium of 43 percent and 24 percent, respectively, over the average trading price of the common shares and debentures on the TSX for the 20-day trading period ending on that date.

How to Tender Shares to The Offer

Microsemi's offers expire at 5 p.m. (Toronto time) on September 22, 2011, unless extended or withdrawn.

The Microsemi's Offers Circular and other documents have been mailed to Zarlink shareholders and can be obtained for free from Microsemi's website or SEDAR.com. Shareholders requiring more information or assistance tendering their shares to the Offers should contact the Information Agent for the Offers, Laurel Hill Advisory Group at assistance@laurelhill.com or toll free at 1-877-452-7184.

About Zarlink

Headquartered in Ottawa, Canada, Zarlink designs mixed-signal semiconductor products for a range of communications and medical applications. Zarlink offers more than 900 active products, and ships approximately 100 million ICs per year to over 400 customers.

About Microsemi

Microsemi Corporation (NASDAQ:MSCC) offers a comprehensive portfolio of semiconductor solutions for: aerospace, defense and security; enterprise and communications; and industrial and alternative energy markets. Products include high-performance, high-reliability analog and RF devices, mixed-signal and RF integrated circuits, customizable SoCs, FPGAs, and complete subsystems. Microsemi is headquartered in Aliso Viejo, Calif., and has more than 2,700 employees globally. Learn more at www.microsemi.com.

The Microsemi Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=1233

Cautionary Statement Regarding Forward-Looking Statements

Microsemi and the Microsemi logo are registered trademarks or service marks of Microsemi Corporation and/or its affiliates. Third-party trademarks and service marks mentioned herein are the property of their respective owners.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Any statements set forth in this news release that are not entirely historical and factual in nature, including without limitation statements related to Microsemi's revenue and earnings guidance and the potential benefits of the acquisition of Zarlink including its immediately accretive impact on earnings and its effect on Microsemi's growth potential are forward-looking statements. These forward-looking statements are based on our current expectations and are inherently subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. The potential risks and uncertainties include, but are not limited to, such factors as the risk that Microsemi will not be able to complete the acquisition without the cooperation of Zarlink's board and management team; the risk that even if the parties work cooperatively on an acquisition, they will not be able to successfully negotiate and enter into a definitive acquisition agreement or, if such an agreement is entered into, the parties will be unable to comply with or satisfy the closing conditions contained therein; the risk that Zarlink's business and technology will not be successfully integrated with Microsemi's business, including product mix and acceptance, achievement of gross margins and operational and other cost synergies; negative or worsening worldwide economic conditions or market instability; downturns in the highly cyclical semiconductor industry; intense competition in the semiconductor industry and resultant downward price pressure; inability to develop new technologies and products to satisfy changes in customer demand or the development by the company's competitors of products that decrease the demand for Microsemi's products; unfavorable conditions in end markets; inability of Microsemi's compound semiconductor products to compete successfully with silicon-based products; production delays related to new compound semiconductors;
variability of the company's manufacturing yields; the concentration of the factories that service the semiconductor industry; delays in beginning production, implementing production techniques, resolving problems associated with technical equipment malfunctions, or issues related to government or customer qualification of facilities; potential effects of system outages; inability by Microsemi to fulfill customer demand and resulting loss of customers; variations in customer order preferences; difficulties foreseeing future demand; rises in inventory levels and inventory obsolescence; potential non-realization of expected orders or non-realization of backlog; failure to make sales indicated by the company's book-to-bill ratio; Microsemi's reliance on government contracts for a portion of its sales; risks related to the company's international operations and sales, including political instability and currency fluctuations; increases in the costs of credit and the availability of credit or additional capital only under more restrictive conditions or not at all; unanticipated changes in Microsemi's tax provisions or exposure to additional income tax liabilities; changes in generally accepted accounting principles; principal, liquidity and counterparty risks related to Microsemi's holdings in securities; environmental or other regulatory matters or litigation, or any matters involving contingent liabilities or other claims; the uncertainty of litigation, the costs and expenses of litigation, the potential material adverse effect litigation could have on Microsemi's business and results of operations if an adverse determination in litigation is made, and the time and attention required of management to attend to litigation; difficulties in determining the scope of, and procuring and maintaining, adequate insurance coverage; difficulties and costs of protecting patents and other proprietary rights; the hiring and retention of qualified personnel in a competitive labor market; acquiring, managing and integrating new operations, businesses or assets, and the associated diversion of management attention; uncertainty as to the future profitability of acquired businesses, and delays in the realization of, or the failure to realize, any accretion from acquisition transactions; any circumstances that adversely impact the end markets of acquired businesses; and difficulties in closing or disposing of operations or assets or transferring work from one plant to another.
In addition to these factors and any other factors mentioned elsewhere in this news release, the reader should refer as well to the factors, uncertainties or risks identified in the company's most recent Form 10-K and all subsequent Form 10-Q reports filed by Microsemi with the SEC. Additional risk factors may be identified from time to time in Microsemi's future filings. The forward-looking statements included in this release speak only as of the date hereof, and Microsemi does not undertake any obligation to update these forward-looking statements to reflect subsequent events or circumstances.

Guidance is provided only on a non-GAAP basis due to the inherent difficulty of forecasting the timing or amount of certain items that have been excluded from the forward-looking non-GAAP measures, and a reconciliation to the comparable GAAP guidance has not been provided because certain factors that are materially significant to Microsemi's ability to estimate the excluded items are not accessible or estimable on a forward-looking basis.


Neither this communication nor any of the statements incorporated by reference in this communication constitutes an offer to buy or solicitation of an offer to sell any securities. INVESTORS AND SECURITY HOLDERS OF ZARLINK ARE URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE APPLICABLE CANADIAN AUTHORITIES AND THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed by Microsemi with the applicable Canadian securities authorities through the website maintained by the Canadian Securities Administrators at http://www.sedar.com and with the SEC through the web site maintained by the SEC at http://www.sec.gov.

Contact Information

    Microsemi Corporation
    John W. Hohener
    Executive Vice President and CFO
    (949) 221-7100

    Microsemi Corporation
    Robert C. Adams
    Vice President of Corporate Development
    (949) 221-7100