CAMBRIDGE, UK and SUNNYVALE, CALIF.
ARM and Artisan combine to deliver system-on-chip IP solutions
- Aug. 23, 2004 ... ARM Holdings plc and Artisan Components, Inc. today announced that they have entered into a definitive agreement under which ARM will acquire Artisan.
Under the terms of the agreement, Artisan stockholders will receive $9.60 in cash and ARM stock equal to 4.41 ARM ADSs for each outstanding Artisan share. Based on closing prices for ARM ADSs as of August 20, 2004, the implied value is $33.89 per Artisan share, representing an aggregate consideration of approximately $913 million.
This transaction represents an excellent strategic combination:
Warren East, Chief Executive Officer of ARM will continue as Chief Executive Officer of the combined companies, with Lucio L. Lanza, Chairman of Artisan, and Mark R. Templeton, President and Chief Executive Officer of Artisan, joining the Board of Directors of ARM as a non-executive director and an executive director, respectively, on completion of the transaction.
Directors and executive officers of ARM and Artisan have agreed to vote in favor of the acquisition in respect of shareholdings amounting to an aggregate of approximately 2.7 percent of ARM's outstanding shares and 4.6 percent of Artisan's outstanding shares.
The completion of the transaction is expected to occur in the fourth quarter of 2004 and is subject to ARM and Artisan stockholder and regulatory approvals and other customary closing conditions.
Artisan is a leading provider of physical IP components for the design and manufacture of complex SoC integrated circuits (ICs). The company's comprehensive product portfolio includes standard cell libraries, embedded memories, input/output cells, analog functions and high-speed interface IP. Artisan's products are optimized for performance, density, power and yield and are available in support of process technologies at many of the world's leading semiconductor manufacturers. Artisan has licensed its IP components to thousands of IC design teams at more than 2,000 companies worldwide.
ARM has relationships with more than 130 silicon manufacturers and with all of the leading Electronic Design Automation (EDA) companies; the company offers a preeminent portfolio of microprocessor, data engine and peripheral IP as well as software and development tools. Building on complementary capabilities, ARM expects that the combined company will deliver one of the broadest ranges of SoC IP solutions to the IC design community.
The combined expertise of both companies in implementing complex systems in silicon will result in highly optimized solutions for low-power and high-performance designs.
'Artisan represents an excellent strategic fit with our vision to become the Architecture for the Digital WorldT,' said Sir Robin Saxby, Chairman, ARM.
'With its focus on the leading manufacturers in the semiconductor industry and a broad range of OEM design teams, Artisan has a proven sales channel which will be highly complementary with the ARM sales channel. The combined entity will be able to reach more customers with a broader product portfolio to better serve our combined user community.'
'As system design complexity increases in deeper sub-micron technologies, so does the need for stronger links between all aspects of SoC development from library elements to advanced microprocessor IP and software,' said Warren East, Chief Executive Officer, ARM.
'Combining forces with Artisan will enrich and expand our total IP offering. Furthermore, the combination is expected to provide greater access to ARM and Artisan technologies, delivering increased value to both companies' customers and creating a new catalyst for innovation in the industry. Delivering enhanced IP where the total system is further optimized for low power and high performance will assist our customers to create new and exciting digital products.
' We will benefit greatly from the insights and experience of the talented Artisan professionals joining our team.'
'The combination of ARM and Artisan signals a new phase in the industry by meeting the increasingly important system design challenge of providing customers with a coherent IP offering, from architecture to silicon implementation,' said Lucio L. Lanza, Chairman, Artisan.
'Putting complementary teams of designers together in one company working on software, system IP and physical IP will enable us to provide a higher level of value to our combined customers.'
'The strategic vision of this transaction is compelling,' said Mark R. Templeton, President and Chief Executive Officer of Artisan.
'By joining forces with ARM, we are furthering our goal to be the IP partner of choice in the semiconductor industry. Combined with ARM, we will be better positioned to invest in new products and promote the adoption of Artisan's products to a broader range of customers.'
Transaction Terms Under the terms of the agreement, Artisan stockholders will receive $9.60 in cash and 4.41 ARM ADSs for each outstanding Artisan share. Based on closing prices for ARM's ADSs as of August 20, 2004, the implied value is $33.89 per Artisan share, representing an aggregate consideration of approximately $913 million.
Each Artisan stockholder will have the right to elect the percentage of the stockholder's consideration received in cash, ARM ADSs or Ordinary Shares (ORDs), subject to pro ration and the total aggregate consideration being approximately $225 million in cash and approximately 374 million in new ORDs (or approximately 125 million ADSs).
The stock component of the consideration is expected to be tax-free for the stockholders of Artisan. Following completion of the transaction, on a fully diluted basis, Artisan stockholders will own approximately 26% of the combined company. The cash portion of the consideration will be funded using ARM's existing cash resources. The terms of the transaction have been unanimously approved by the Boards of Directors of both companies.
Financial overview As of June 30, 2004, under U.S. GAAP, Artisan had revenues and profits after taxes in the previous 12 months of $82.9 million and $17.3 million, respectively, and had net asset value of $205.1 million, of which $140.4 million was cash, cash equivalents and marketable securities. For the most recent fiscal year ended September 30, 2003, Artisan had revenues and profits after taxes of $68.5 million and $7.3 million, respectively, under U.S. GAAP.
The transaction is expected to be non-dilutive to ARM's earnings per share within 12 months from closing, excluding the impact of one-time and non-cash acquisition related charges.
Break-up fee arrangements ARM has agreed to pay a break-up fee to Artisan of approximately $18 million payable upon certain termination events under the transaction agreement. Furthermore, Artisan has agreed to pay a break-up fee to ARM of approximately $31 million or $18 million, depending on the nature of the termination event, payable under the transaction agreement upon certain termination events.
Management and Board of Directors Lucio L. Lanza, Chairman of Artisan, and Mark R. Templeton, President and Chief Executive Officer of Artisan, will join the Board of Directors of ARM following completion of the transaction, increasing the total number of directors to 12. Mark R. Templeton is expected to enter into a service contract with the Company with effect from completion of the transaction.
Approvals, Timing and Consent The completion of the transaction is expected to occur in the fourth quarter of 2004 and is subject to ARM and Artisan stockholder and regulatory approvals, other customary closing conditions and the admission of the new ARM shares to the Official List of the UK Listing Authority and to trading on the London Stock Exchange. ARM stockholders will receive in due course a circular containing full details of the acquisition and convening an Extraordinary General Meeting, and listing particulars related to the new ARM shares to be issued as consideration for the acquisition. Artisan stockholders will receive a proxy statement in connection with Artisan's special meeting of stockholders.
Artisan is a leading provider of physical intellectual property (IP) components for the design and manufacture of complex system-on-a-chip integrated circuits. Artisan's products include embedded memory, standard cell, input / output, analog and mixed-signal components, which are designed to achieve the best combination of performance, density, power and yield for a given manufacturing process. Artisan has licensed its IP components to over 2,000 companies involved in integrated circuit design. Artisan is headquartered in Sunnyvale, California. More information about Artisan, including free library access, can be found at www.artisan.com.
ARM designs the technology that lies at the heart of advanced digital products, from wireless, networking and consumer entertainment solutions to imaging, automotive, security and storage devices. ARM's 16/32-bit RISC microprocessors, data engines, peripherals, software and tools, combined with the company's broad partner community, provide a total system solution that offers a fast, reliable path to market for leading electronics companies. More information on ARM is available at www.arm.com.
ARM is at the heart of the world’s most advanced digital products. Our technology enables the creation of new markets and transformation of industries and society.