TriQuint Semiconductor to combine with RF Micro Devices to create $2 billion RF and microwave company

HILLSBORO, Ore., 1 March 2014. Radio-frequency (RF) solutions supplier TriQuint Semiconductor Inc. (Nasdaq:TQNT) and RF Micro Devices Inc. (Nasdaq:RFMD), a designer and manufacturer of high-performance solutions, will merge into a new company with a new name and shared leadership team.

The boards of directors of RFMD and TriQuint have unanimously approved the transaction.

The merger will create new growth opportunities in three large global markets: mobile devices, network infrastructure, and aerospace/defense, with scale advantages, new products, and an improved operating model.

RFMD and TriQuint together will offer “the industry's broadest portfolio of critical enabling technologies to develop and commercialize tightly integrated solutions at record speeds,” says a company representative. The combination also creates “a leader in infrastructure and defense” with approximately $500 million in annual revenue, as well as a broad portfolio of products and foundry services supporting applications such as radar, next-generation base stations, optical communications, and the Internet of Things.

The combination is expected to achieve at least $150 million in cost synergies; $75 million in annualized synergies exiting the first year after closing and an additional $75 million exiting the second year. The transaction is expected to be accretive to non-GAAP EPS in the first full fiscal year following the closing of the transaction.

"The world's demand for mobile data is growing exponentially," says RFMD CEO and President Bob Bruggeworth. "The combination of TriQuint and RFMD creates a new leader in RF solutions with expertise in mobile devices and complex infrastructure and global defense applications. With this merger of equals, we will bring under one roof all of the critical RF building blocks necessary to innovate at the heart of what makes mobilemobile – the crucial back-and-forth data flow between the mobile device and the network. We will harness this innovation for the benefit of all our customers – from mobile to infrastructure to defense."

"I believe this is an industry shaping event," explains TriQuint CEO Ralph Quinsey. "Through this combination of RFMD and TriQuint we form a diversified market leader with a highly compatible combination of products and technologies and a world class team focused on innovation and superior financial results. The alignment of culture between the two companies and the well matched products, capabilities and technologies will create compelling new opportunities."

This transaction combines complementary product portfolios, featuring power amplifiers (PAs), power management integrated circuits (PMICs), antenna control solutions, switch-based products and premium filters – and leverages these to deliver the industry's most comprehensive portfolio of high-performance mobile solutions, officials say. It will also strengthen the combined company's service to the infrastructure and defense/aerospace industries and enable advanced gallium nitride (GaN) solutions for additional markets and applications.

The new company will have a shared leadership team. TriQuint CEO Ralph Quinsey will serve as non-executive chairman, and RFMD CEO Bob Bruggeworth will serve as chief executive officer. The board of directors will be made up of 10 directors, with five directors from the existing board of each company. Eight of the 10 directors will be independent. TriQuint CFO Steve Buhaly will serve as chief financial officer and RFMD CFO Dean Priddy will serve as executive vice president of administration, reporting to the CEO and responsible for integration and synergy value creation. Additional senior leaders of the combined company will include RFMD's Eric Creviston as president of mobile products, TriQuint's James Klein as president of infrastructure and defense products, TriQuint's Steven Grant as corporate vice president for Fab Technology & Manufacturing and RFMD's Jim Stilson as corporate vice president for Assembly/Test Technology & Manufacturing. Other leaders will be named later this year.

The transaction is expected to close in the second half of calendar 2014 subject to approval by the shareholders of both companies, the receipt of regulatory approvals, and other customary closing conditions.

Watch for “The Last Word” in the March issue for an executive Q&A with James Klein.