MaxLinear Gains Entropic’s Connected Home Portfolio in Buyout Deal
MaxLinear (NYSE: MXL), a Carlsbad, CA-maker of radio frequency and mixed-signal semiconductors, has agreed to acquire San Diego-based Entropic Communications (NASDAQ: ENTR) in a cash-and-stock deal valued at nearly $287 million.
The acquisition enables MaxLinear to broaden its access to broadband technology for the “connected home” and related markets by adding Entropic’s proprietary technology portfolio to its own expertise in telecommunications and wireless network infrastructure.
Entropic has more than 1,500 patents (issued and pending) covering semiconductor technologies broadly deployed across major cable, satellite, and fiber optic service providers. The company helped pioneer the Multimedia over Coax Alliance (MoCA) technical standard for home networks, invented key Direct Broadcast Satellite technology, and developed certain set-top box technology.
In a statement released after official trading ended Tuesday, MaxLinear said its cash-and-stock offer ($1.20 in cash and .22 share of MaxLinear’s common stock for each common share of Entropic) amounted to $181 million in “implied enterprise value,” a valuation that includes debt and excludes cash. Entropic has no debt, and had $105.8 million of available cash as of Dec. 31, which brings the total value of the transaction to almost $287 million.
MaxLinear says the acquisition is expected to be immediately accretive to its non-GAAP earnings. The company says it could realize more than $20 million in cost savings in the first year after the deal closes.
The boards of both MaxLinear and Entropic unanimously approved the buyout. If shareholders of both companies approve the deal, MaxLinear shareholders would own about 65 percent of the combined company, and Entropic shareholders would hold about 35 percent.
The deal also has to clear customary regulatory reviews, and is expected to close by the end of June.