AUSTIN, TEXAS, June 25, 2007 - Legerity, Inc. announced today it has entered into an agreement to be acquired by Zarlink Semiconductor, Inc. (NYSE/TSX:ZL), an Ottawa, Canada-based publicly traded company delivering semiconductor solutions that drive the capabilities of voice, enterprise, broadband and wireless communications. Under the terms of the agreement, Zarlink will acquire Legerity Holdings, Inc. for US$134.5 million in cash, subject to working capital adjustments. The transaction is expected to close in late July, subject to closing conditions, including expiration or termination of the waiting period under the U.S. Hart-Scott-Rodino Antitrust Act. Merrill Lynch acted as exclusive financial advisor to Legerity in connection with the transaction.
"Combining Zarlink and Legerity creates a well positioned semiconductor company with the scale necessary to compete effectively in a consolidating and growing network communications industry," said Hank Perret, President and CEO, Legerity. "Legerity brings to Zarlink field-proven technologies, engineering knowledge and established customer relationships to help build a fast-growing, profitable company."
"This acquisition will expand and accelerate Zarlink's plans for the voice-over-packet market," said Kirk K. Mandy, President and CEO, Zarlink Semiconductor. "Both companies are designing complementary technologies that enable high-quality voice services. We share a very similar customer base but are not direct competitors. As a result, we expect there to be substantial cross-selling opportunities across a larger customer base and plan to deliver more integrated, higher-value solutions for the rapidly growing voice-over-Internet and voice-over-cable markets."
Legerity's growth is fueled by service providers, including telephone and cable system operators, who are bundling triple-play telephone, television and Internet services for enterprise and residential customers. With the continued evolution to next-generation packet networks and the global availability of broadband connectivity, equipment manufacturers have designed Legerity's products into fiber-based access equipment as well as cable and DSL (digital subscriber line) residential gateways. Over the past three years Legerity has grown revenue from US$88 million in calendar year 2004 to US$113 million in calendar year 2006. For the calendar year 2006, income from operations was US$5.1 million and net income was US$4.1 million.
Zarlink's broad portfolio of network synchronization, voice enhancement and telecom-related products will be combined with Legerity's products and technologies to create a powerful platform for the growing deployment of next-generation networks. Legerity President and CEO Hank Perret will lead the creation of a combined network communications product portfolio. Mr. Perret will report to Zarlink President and CEO Kirk Mandy. A number of Legerity's executives will be joining Zarlink's management team.
Zarlink, headquartered in Ottawa, Canada, has more than 30 years of experience designing and manufacturing semiconductor solutions for network communications, optoelectronics and ultra low-power medical telemetry applications. The company employs approximately 650 people world wide, with more than 3,000 customers in 100 different countries.
Legerity, headquartered in Austin Texas with 216 employees globally, is a leading supplier of analog voice technologies for carrier, enterprise and residential gateway equipment. With over 750 million chipsets deployed, Legerity utilizes proprietary processes to offer industry-leading performance and IC integration. Through comprehensive reference designs and focused customer support, the company provides quick time-to-market solutions while minimizing the customers' cost of development.
About Zarlink Semiconductor
For over 30 years, Zarlink Semiconductor has delivered semiconductor solutions that drive the capabilities of voice, enterprise, broadband and wireless communications. The Company's success is built on its technology strengths including voice and data networks, optoelectronics and ultra low-power communications. For more information, visit www.zarlink.com.
About Legerity, Inc.
Legerity is a trusted name in voice integrated circuits (ICs) for high-voltage, analog/mixed signal semiconductor and software technologies. Legerity has years of demonstrated expertise in multiple voice technologies, world-class factory and field engineering support with a "high touch" customer philosophy, and consistent, reliable, high volume supply of premium quality IC components. Headquartered in Austin, Texas, Legerity supports the needs of a global customer base through proprietary semiconductor technologies, superior manufacturing processes, and more than 500 U.S. and international patents. Visit Legerity on the Web at www.legerity.com.