Linear Technology Corporation (LLTC) Surges on Buyout by Analog Devices Inc.
Shares of Milpitas, CA, based Linear Technology Corporation (LLTC) rose on Tuesday, against the backdrop of a mixed day in stocks overall. Linear's stock was up 28.93%, rising $14.02 per share, to close at $62.49, on volume of 7,186,770 shares. The company announced that it being purchased by Analog Devices, Inc. (ADI) in a transaction valued at $30 billion.
On Tuesday, Linear Technology and Analog Devices, Inc. announced that they have entered into a definitive agreement in which Analog Devices will acquire Linear for cash and stock in a transaction valued at about $30 billion. When the acquisition is complete, Analog Design will be the premier global analog technology company, with expected revenue of $5 billion per year.
Linear Technology shareholders will receive $46.00 per share in cash and 0.2321 of a share of Analog Devices common stock for each share of Linear Technology common stock they hold at the closing of the transaction. The deal values Linear Technology at approximately $60.00 per share, with an equity value for Linear Technology of approximately $14.8 billion. The transaction is expected to close near the end of the first half of 2017, and is subject to regulatory approvals, approval by Linear’s shareholders, and other customary closing conditions.
Based on Monday's closing prices, the deal values Linear shares at $60.05, or a 24% premium. Analog Devices said it expects to fund the transaction with 58 million new common shares, which would increase the total shares outstanding by about 19%, about $7.3 billion in new debt and cash on hand.
Analog Devices closed up 3.87%, rising $2.34, to close at $62.87 per share on volume of 4,164,012 shares. Based in Norwood, MA, the company designs, manufactures and markets analog, mixed-signal and digital signal processing integrated circuits used in virtually all types of electronic equipment. The company was founded in 1965, and its stock trades on the NASDAQ.
“For 35 years, Linear Technology has had great success by growing its business organically," said Linear CEO and co-founder, Bob Swanson. "However, this combination of Linear Technology and Analog Devices has the potential to create a combination where one plus one truly exceeds two...Analog Devices is a highly respected company. By combining our complementary areas of technology strength, we have an excellent opportunity to reinforce our leadership across the analog and power semiconductor markets, enhancing shareholder value. Together, Linear Technology and Analog Devices will advance the technology and deliver innovative analog solutions to our customers worldwide.”
In other news on Tuesday, Linear announced the results of its 2016 fourth quarter for the period ended July 3. Earnings came in a $132.4 million, or 3.1% over the previous quarter, but a decrease of 0.3% compared with the same quarter a year earlier. Earnings per diluted share hit $0.54 per share for the quarter, virtually unchanged from the fourth quarter of fiscal year 2015. Revenue for the quarter was reported at $378 million, a 3.5% increase over the previous quarter, but 1.5% below the fourth quarter of 2015.
For the fiscal year, earnings were $494.3 million, a decline of 5.1% from net earnings for fiscal 2015. Earnings per diluted share were reported at $2.02, or $0.10 per share below full year earnings per share for fiscal 2015. Revenue for the fiscal year were reported at $1,423.9 million, 3.5% lower than from revenue of $1,475.1 million in fiscal 2015.
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