The proposed all-cash transaction values ARC at 16.25 pence per share, or an equity value of approximately £25.2 million ($41.0 million) on a fully-diluted basis. The Directors of ARC have recommended unanimously that ARC’s shareholders accept the offer. Virage Logic expects that the offer document will be mailed to ARC shareholders shortly. The offer period will extend for a minimum of 21 days from the date the offer document has been mailed, and the transaction is expected to close by the end of Virage Logic’s first fiscal quarter of 2010, which ends on December 31, 2009. The offer is subject to certain limited closing conditions, including that at least 90% of the ARC shares have been tendered into the offer.
"The acquisition of ARC would represent another significant milestone in the execution of our vision of establishing Virage Logic as a broad-line supplier of highly differentiated semiconductor IP to our global IDM, foundry and fabless customers. Through both our organic and inorganic growth initiatives, we have significantly expanded our portfolio of standard products,” said Dan McCranie, Virage Logic’s executive chairman. “With approximately $24 million in revenue for the trailing twelve months ended June 30, 2009 and over 150 customers, ARC would contribute meaningful scale to our business. Furthermore, ARC would significantly expand our market opportunity to include microprocessor cores, the largest segment of the semiconductor IP market.”
"In our engagements with well over 300 existing worldwide customers, we have seen the need to provide additional IP building blocks to enable successful and timely development of large SoC products," said Dr. Alex Shubat, president and CEO of Virage Logic. "Our highly differentiated product portfolio comprising memory compilers, logic libraries, non-volatile memory, test and repair solutions, and high speed interfaces have set the standard for superior quality and value added features for a variety of end applications. By bringing ARC’s talented team into our company, we will be complementing our existing technological and operational nucleus to provide even more comprehensive product solutions for our customers."
"ARC has established a leading position in the provision of customizable Solution-to-Silicon IP to consumer and semiconductor companies globally. The company has been rationalized and strengthened under its new leadership, and with its market-leading technology and outstanding worldwide customer base, ARC is well positioned for a successful future,” said Richard Barfield, Chairman of ARC. “As Virage Logic has recognized, the combination of the technology, expertise and customer bases of ARC and Virage Logic will create substantial opportunities for the Enlarged Group and its customers. In addition, the ARC Directors believe that the Offer delivers value and certainty to ARC Shareholders. Consequently, the ARC Directors are able to recommend the Offer unanimously to ARC Shareholders.”
On a non-GAAP basis, which excludes the effects of FAS123R stock compensation expense, restructuring, and amortization of intangible assets and acquisition related charges, Virage Logic expects the proposed acquisition to be accretive between $0.10 and $0.14 earnings per share to fiscal year 2010. Immediately following the closing of the acquisition, Virage Logic expects to have a cash balance of approximately $20 - $23 million.
Cowen and Company, LLC and Arbuthnot Securities Limited are acting as joint financial advisors to Virage Logic. Jefferies International Limited and Woodside Capital Partners are acting as joint financial advisors to ARC.
About ARC International plc
ARC International is a leading provider of customizable Solution to Silicon IP to consumer and semiconductor companies globally. ARC’s award-winning, vertically integrated audio and video solutions enable high quality multimedia content to be captured, shared, and played on a wide range of electronics devices. ARC has over 150 customers which, in aggregate, ship hundreds of millions of ARC-Based™ chips annually in products such as mobile televisions, portable media players, WiFi/WiMAX-enabled computers, flash storage, digital cameras, network appliances, and medical and government systems. ARC International maintains a worldwide sales presence with corporate and research and development offices in San Jose and Lake Tahoe, Calif., and St. Petersburg, Russia.
ARC International is listed on the London Stock Exchange as ARC International plc (LSE: ARK).
About Virage Logic
Virage Logic is a leading provider of semiconductor intellectual
property (IP) for the design of complex integrated circuits. The
Company's highly differentiated product portfolio includes embedded
SRAMs, embedded NVMs, embedded memory test and repair, logic libraries,
memory development software, and interface IP solutions. As the
industry's trusted semiconductor IP partner, foundries, IDMs and fabless
customers rely on Virage Logic to achieve higher performance, lower
power, higher density and optimal yield, as well as shorten
time-to-market and time-to-volume. For further information, visit
www.viragelogic.com .
