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Analog Devices Bids $2B for Hittite Microwave

Stocks in this article: ADI HITT

NEW YORK (The Deal) -- Semiconductor company Analog Devices (ADI) said Monday it would acquire rival Hittite Microwave (HITT) in a $2 billion deal that would boost its radio frequency and signal conversion chip offerings.

Terms of the deal call for Analog to pay $78 per share for Chelmsford, Mass.-based Hittite, a premium of 28.8% over the target's $60.56 Friday close.

Hittite manufactures integrated circuits, modules and subsystems for radio frequency microwave and millimeter wave applications. The company's chips are used in cellular, optical and satellite communications, in medical imaging and in defense electronics.

Analog Devices, of nearby Norwood, Mass., said that the purchase would help it grow in the industrial and communications infrastructure markets.

"Our combined capabilities will enable us to bring more complete solutions to our customers and address more of the industrial, communications infrastructure, and automotive markets," said Analog Devices CEO Vincent Roche in a statement. "We welcome the very talented Hittite team, as we together leverage our strong product portfolios and customer relationships to create greater value for all our stakeholders."

Hittite, which went public in 2005, last month bought wideband amplifier module maker Keragis Corp. of San Diego for an undisclosed sum.

Company CEO Rick D. Hess said, "I look forward to joining Analog Devices and I am confident our combined efforts will accelerate the course of innovation throughout cellular and microwave communications infrastructure, automotive, industrial instrumentation, aerospace and defense."

The agreement is the second billion-dollar-plus semiconductor deal announced in recent months, following radio frequency component maker RF Micro Devices Inc.'s February announcement it would acquire TriQuint Semiconductor Inc. for about $1.5 billion.

Credit Suisse Group's Steve Geller, David Wah and Ernie Ruehl, and WilmerHale's Mark Borden, Jay Bothwick and Joe Conahan advised Analog Devices on the deal. Hittite received financial advice from a Deutsche Bank AG team including Mark Keene, David Locala and Jim Stynes, and legal counsel from Foley Hoag LLP's Bob Sweet, Bill Kolb, Alex Aber, Joe Basile, Dan Clevenger, Nell Richmond and James Schneider. Skadden, Arps, Slate, Meagher & Flom LLP advised Deutsche Bank.

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