Broadcom (BRCM) Offers $9.25/Share Cash Bid for Emulex (ELX)
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Broadcom Corporation (Nasdaq: BRCM) today announced that it has made a proposal to the Emulex Corporation (NYSE: ELX) Board of Directors to acquire all the outstanding shares of Emulex common stock for $9.25 per share in cash, representing a total equity value of approximately $764 million. The offer represents a 40 percent premium above the closing price of Emulex common stock on April 20, 2009, a 62 percent premium to trailing 30 day average price per share and an approximately 85 percent premium to enterprise value.
Broadcom believes that its leadership in Ethernet networking, together with Emulex's deep expertise in Fibre Channel storage networking, will enable the combined company to accelerate the development of converged solutions for enterprise networks.
This combination offers compelling benefits to shareholders, customers and employees of both companies:
- Accelerates vision of network conversion which promises significant benefits to customers and the industry.
- Creates significant shareholder value for both companies:
- Emulex shareholders will receive a substantial premium to the current value of their shares and immediate value, in cash, for their equity stake in Emulex.
- Broadcom expects the acquisition of Emulex will be accretive to earnings per share in 2010.
- Broadcom expects to increase both companies' revenue growth through an improved ability to innovate next-generation solutions for customers of both companies, as well as broadening the distribution channels for each company's products.
- Broadcom's cash offer will be funded from its approximately $2.0 billion of existing cash and marketable securities on hand, with the fundamentals of Broadcom's capital position remaining strong.
- Emulex shareholders will receive a substantial premium to the current value of their shares and immediate value, in cash, for their equity stake in Emulex.
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