With deep pockets, On American intends to enter the automotive and industrial low-power connection market by acquiring Quantenna...
Today, ON Semiconductor Corporation and Quantenna jointly announced that they have entered into a definitive agreement for ON Semiconductor to acquire Quantenna for $24.50 per share, or $1.07 billion, in a full-cash transaction.
Key highlights of the deal:
Combining the strengths of the two companies, we can enter the automotive and industrial low-power connectivity market
Combine On Semiconductor's expertise in power management and Bluetooth technology with Quantenna's Wi-Fi and software capabilities
Immediately accretive to non-GAAP earnings per share and available cash flow
The acquisition will significantly enhance On Semiconductor's connectivity portfolio, adding Quantenna's industry-leading Wi-Fi technology and software capabilities.
Founded in 2006 and headquartered in California, USA, Quantenna is a high performance Wi-Fi solution provider with numerous industry firsts in Wi-Fi technology, providing comprehensive Wi-Fi solutions from chip to system to software. On is a leading global supplier of automotive electronics, offering a comprehensive range of energy-efficient power management, analog ics, sensors, discrete devices, SOCs and custom devices.
'The acquisition of Quantenna is another step in strengthening the company's position in the industrial and automotive markets, combining On's patented knowledge in efficient power management and extensive sales and distribution network with Quantenna's industry-leading Wi-Fi technology and software expertise platform,' said Keith Jackso, President and CEO of On. Strengthens On's presence in the fast-growing market for low-power connectivity in industrial and automotive applications.
Dr. Sam Heidari, Chairman and CEO of Quantenna, said: 'This transaction is great news for Quantenna employees and customers around the world. As part of On Semiconductor, Quantenna will benefit from a world-class company that is committed to providing its customers with the best end-user experience. We are proud of our accomplishments and look forward to a smooth transition with the ON Semiconductor team, exciting new opportunities for Quantenna's talented employees, and cementing our long-term position as a leading Wi-Fi technology innovator.'
Upon closing, the transaction is expected to be immediately accretive to ON Semiconductor's non-GAAP earnings per share and available cash flow, excluding any non-recurring acquisition-related charges, amortization of fair value increment reserves and amortization of acquired intangible assets.
The transaction is not subject to financing conditions. On Semiconductor plans to fund the transaction with its cash on hand and its existing revolving credit facility available.
The closing of the transaction is subject to Quantenna's shareholder approval, regulatory approvals and other customary closing conditions. The transaction has been approved by the boards of directors of ON Semiconductor and Quantenna and is expected to close in the second half of 2019.
It is important to note that the proposed transaction does not require the approval of ON Semiconductor's shareholders.
Quantenna's achievements in Wi-Fi
As the performance requirements of next-generation Wi-Fi increase and more advanced approaches are required to design high-speed wireless communications products, Quantenna's competitive advantages include support for state-of-the-art specifications, proprietary technology architectures, and advanced software and system-level algorithms. In addition, Quantenna Communications has created a cloud-based Wi-Fi analytics and monitoring platform to diagnose and repair network inefficiencies remotely.
Quantenna has shipped more than 80 million chips to customers across four semiconductor process generations. According to market research agency research report data estimates that the global Wifi chipset market is expected to grow from $3.8 billion in 2016 to $5.2 billion in 2021, with a compound annual growth rate of 7%.
Quantenna is a manufacturer of high-performance WiFi chips and devices, while On is a world-renowned supplier of automotive semiconductors. Both are leaders in their respective industries, and if the deal goes through, the combination of the two could create a new semiconductor giant.