said Tuesday is has agreed to acquire
( PDSN), a developer of Power over Ethernet (PoE) technology, which allows power to be transmitted over the same network cable as data.
Under terms of the agreement, each PowerDsine shareholder will receive $8.25 in cash and 0.1498 shares of Microsemi common stock for each common share of PowerDsine. Based on closing prices on Oct. 23, the total consideration values PowerDsine at $11 a share, an 18.5% premium, for a total consideration of $245 million on a fully diluted basis, or $168 million net of cash acquired.
Microsemi, which designs, manufactures and markets analog and mixed-signal integrated circuits and semiconductors, said the number of PoE-enabled switch ports is estimated to grow from roughly 28 million in 2005 to more than 100 million by 2009 due to growing demand for PoE capability from VoIP phones, WLAN access points and remote security cameras.
"We believe the addition of PowerDsine's experienced team of analog and mixed signal design engineers will yield excellent results both in the PoE market and, more broadly, across a number of important commercial analog and mixed-signal markets we serve today," Microsemi CEO James Peterson said. "We are also excited to develop Microsemi's presence in Israel to leverage the country's outstanding engineering talent base.''
Israel-based PowerDsine employs about 136 employees worldwide, including 94 engineers, and has facilities in Hod Hasharon, Israel; San Jose, Calif.; and Melville, N.Y.; and regional sales offices in China, India, Japan, Taiwan and the United Kingdom.
The deal is expected to close in the second quarter of Microsemi's fiscal year 2007. Irvine, Calif.-based Microsemi expects the transaction to be neutral to slightly dilutive to earnings per share in the first year after closing and accretive thereafter.
Separately, PowerDsine posted third-quarter results before the bell Tuesday. The company reported a net loss of $600,000, or 3 cents a share, as compared to net income of $900,000, or 4 cents a share, in the prior-year period. Non-GAAP net income was $600,000, or 3 cents a share, compared to non-GAAP net income for the third quarter of 2005 of $1.4 million, or 7 cents a share.
Sales were $9.6 million, down from $10.9 million in the third quarter of 2005. Analysts, on average, were expecting earnings of 2 cents a share on $9.4 million in revenue, according to Thomson First Call.
Shares of Microsemi were lower by $1.87, or 10.2%, at $16.50 in late-morning trading Tuesday. Shares of PowerDsine were up $1.05, or 11.3%, at $10.33.