Integrated Device Tech (IDT), PLX Tech (PLXT) Terminate Merger
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Integrated Device Technology, Inc. (Nasdaq: IDTI) and PLX Technology, Inc. (Nasdaq: PLXT) announced that they have mutually agreed to terminate their merger agreement pursuant to which IDT would acquire PLX Technology. Concurrently, IDT also announced that it is withdrawing its related exchange offer to acquire all of the issued and outstanding shares of common stock, $0.001 par value, of PLX Technology and instructed Computershare, the exchange agent for the exchange offer, to promptly return all previously tendered shares. As of the close of business on December 19, 2012, 21,876,215 shares were previously tendered in the exchange offer.
The decision to terminate the merger agreement and withdraw the exchange offer was made in response to a determination by the United States Federal Trade Commission ("FTC") to file an administrative complaint challenging IDT's proposed acquisition of PLX Technology and the absence of a clear path for the parties to complete the proposed transaction. Subsequent to the FTC determination and following the parties review of the FTC's decision and a discussion of appropriate next steps, IDT informed PLX Technology that, with the facts and circumstances known to IDT regarding the FTC decision at this time, consistent with its rights under the terms of the merger agreement, IDT would not extend the outside date for the exchange offer past January 31, 2013 and would not agree to any settlement or remedies with the FTC which included IDT disposing of any portion of its business, assets or properties.
"We are disappointed by the FTC's decision to seek to enjoin the transaction," said Ted Tewksbury, president and chief executive officer of IDT. "Although we continue to believe in the benefits of the transaction, our management and board of directors have determined that it was in the best long-term interests of IDT and its stockholders not to pursue what would likely be a protracted, costly and unpredictable litigation process. PLX impressed the IDT team throughout the process with their professionalism and capabilities. During this period of time PLX effectively executed on plans to significantly reduce operating expenses consistent with IDT's synergies savings plan which has improved its financial condition."
"After discussions with IDT and our board of directors, we agree that litigation to pursue the acquisition by IDT is not in the best interests of our stockholders," said David Raun, interim president and chief executive officer of PLX Technology. "IDT informed us that they would exercise their right to not extend the outside date of the exchange offer beyond January 31, 2013. Given that litigation against the FTC to a final resolution could not happen as a practical matter before January 31, 2013, PLX agreed to terminate the transaction now to avoid fruitless legal expenses. While we are disappointed with the FTC decision, we are excited about PLX Technology's prospects as an independent company. In the last six months we divested unprofitable businesses, reducing our annual operating expenses by approximately $20M, and strengthened our focus and technology leadership in our core PCI Express business. We have a solid foundation for long term growth, profitability and positive cash flow."
The decision to terminate the merger agreement and withdraw the exchange offer was made in response to a determination by the United States Federal Trade Commission ("FTC") to file an administrative complaint challenging IDT's proposed acquisition of PLX Technology and the absence of a clear path for the parties to complete the proposed transaction. Subsequent to the FTC determination and following the parties review of the FTC's decision and a discussion of appropriate next steps, IDT informed PLX Technology that, with the facts and circumstances known to IDT regarding the FTC decision at this time, consistent with its rights under the terms of the merger agreement, IDT would not extend the outside date for the exchange offer past January 31, 2013 and would not agree to any settlement or remedies with the FTC which included IDT disposing of any portion of its business, assets or properties.
"We are disappointed by the FTC's decision to seek to enjoin the transaction," said Ted Tewksbury, president and chief executive officer of IDT. "Although we continue to believe in the benefits of the transaction, our management and board of directors have determined that it was in the best long-term interests of IDT and its stockholders not to pursue what would likely be a protracted, costly and unpredictable litigation process. PLX impressed the IDT team throughout the process with their professionalism and capabilities. During this period of time PLX effectively executed on plans to significantly reduce operating expenses consistent with IDT's synergies savings plan which has improved its financial condition."
"After discussions with IDT and our board of directors, we agree that litigation to pursue the acquisition by IDT is not in the best interests of our stockholders," said David Raun, interim president and chief executive officer of PLX Technology. "IDT informed us that they would exercise their right to not extend the outside date of the exchange offer beyond January 31, 2013. Given that litigation against the FTC to a final resolution could not happen as a practical matter before January 31, 2013, PLX agreed to terminate the transaction now to avoid fruitless legal expenses. While we are disappointed with the FTC decision, we are excited about PLX Technology's prospects as an independent company. In the last six months we divested unprofitable businesses, reducing our annual operating expenses by approximately $20M, and strengthened our focus and technology leadership in our core PCI Express business. We have a solid foundation for long term growth, profitability and positive cash flow."
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