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ARM and Artisan Combine to Deliver System-on-Chip IP Solutions
Transaction Creates One of the Broadest Suppliers of IP in the
Industry; Companies to Combine Highly Complementary Products
and Sales Channels
CAMBRIDGE, England & SUNNYVALE, Calif.—(BUSINESS WIRE)—Aug. 23, 2004—
ARM Holdings plc (Nasdaq:ARMHY)(LSE:ARM) and Artisan Components,
Inc. (Nasdaq:ARTI) today announced that they have entered into a
definitive agreement under which ARM will acquire Artisan.
Highlights
-- 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:
-- Enables the combined company to deliver one of the
industry's broadest portfolios of system-on-chip (SoC)
intellectual property (IP) to their extensive, combined
customer base.
-- Better positions the combined company to take advantage of
growth opportunities across multiple industries as system
design complexity increases in the sub-micron age.
-- Highly complementary sales channels combining ARM's
channel to more than 130 silicon manufacturers, with
Artisan's channel to more than 2,000 companies.
-- Strengthens the links between key aspects of SoC
development, enabling the combined company to deliver
solutions that are further optimized for power and
performance.
-- 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 World(TM)," 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.
ARM and Artisan will be hosting a presentation and conference
calls to discuss the transaction on Monday, August 23, 2004, at
Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London,
WC2A 1PB:
Presentation and Call
9.30am BST / 10.30am CET / 4.30am EST / 1.30am PST
UK / European Participants - Telephone: +44 (0)1452 542 303
US Participants - Telephone: +1 866 389 9778
Call Only
1.30pm BST / 2.30pm CET / 8.30am EDT / 5.30am PST
UK / European Participants - Telephone: +44 (0) 1452 542 304
US Participants - Telephone: +1 866 389 9780
ARM will also host an audio webcast at www.arm.com, as well as
provide a taped recording available from approximately one hour after
the call's end, for five days. Dial-in details as follows:
9.30am BST / 10.30am CET / 4.30am EST / 1.30am PST
UK / Europe - Telephone: +44 (0)1452 55 00 00; Access code
9652259#
US - Telephone: +1 706 645 9291; Access code: 9652259#
1.30pm BST / 2.30pm CET / 8.30am EDT / 5.30am PST
UK / Europe - Telephone: +44 (0) 1452 55 00 00; Access code
9652260#
US - Telephone: +1 706 645 9291; Access code: 9652260#
About Artisan
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.
About ARM
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.
Important Information for Investors and Stockholders
ARM and Artisan will file a proxy statement/prospectus with the
SEC in connection with the proposed transaction. ARM and Artisan urge
investors and security holders to read the proxy statement/prospectus
when it becomes available and any other relevant documents filed with
the SEC because they will contain important information. Investors and
security holders will be able to obtain these documents free of charge
at the website maintained by the SEC at www.sec.gov. In addition,
documents filed with the SEC by ARM are available free of charge by
contacting ARM Holdings plc Investor Relations, 110 Fulbourn Road,
Cambridge, UK, CB1 9NJ, +44 (0)1223 400400, and on ARM's web site at
www.arm.com; documents filed with the SEC by Artisan are available
free of charge by contacting Artisan Components, Inc. Investor
Relations, 141 Caspian Court, Sunnyvale, California, 94089, (408)
734-5600, on Artisan's web site at www.artisan.com or on the SEC's web
site at www.sec.gov. Documents on Artisan's web site are not a part of
this press release.
ARM and ARM's directors and executive officers may be deemed to be
participants in the solicitation of proxies from the stockholders of
Artisan in connection with the transaction. A description of the
interests of directors and executive officers of ARM is set forth in
its Annual Report on Form 20-F for the year ended December 31, 2003,
which was filed with the SEC. If and to the extent that any of ARM's
directors and executive officers will receive any additional benefits
in connection with the transaction that are unknown as of the date of
this filing, the details of those benefits will be described in the
definitive proxy statement/prospectus. Investors and security holders
can obtain additional information regarding the direct and indirect
interests of ARM's directors and executive officers in the transaction
by reading the definitive proxy statement/prospectus when it becomes
available.
Artisan and Artisan's directors and executive officers may be
deemed to be participants in the solicitation of proxies from its
stockholders in connection with the transaction. A description of the
interests of directors and executive officers of Artisan is set forth
in the proxy statement for Artisan's 2003 annual meeting of
stockholders, which was filed with the SEC on January 27, 2004. Mr.
Templeton is expected to enter into an employment agreement with ARM,
effective upon the closing of the proposed acquisition, that will be
described in the proxy statement/prospectus. Mr. Lanza, Artisan's
Chairman, may be deemed to be a participant in the solicitation of
proxies of ARM's shareholders in connection with the proposed
acquisition. A description of the non-employee director appointment
letter similar to that into which Mr. Lanza would enter in upon
joining the ARM Board of Directors at the closing of the proposed
acquisition is described in ARM's Annual Report on Form 20-F. If and
to the extent that any of Artisan's directors and executive officers
will receive any additional benefits in connection with the
transaction that are unknown as of the date of this filing, the
details of those benefits will be described in the definitive proxy
statement/prospectus. Investors and security holders can obtain
additional information regarding the direct and indirect interests of
Artisan's directors and executive officers in the transaction by
reading the definitive proxy statement/prospectus when it becomes
available.
Cautionary Statement Regarding Forward-Looking Statements
This document contains certain forward-looking statements about
ARM and Artisan. When used in this document, the words "anticipates,"
"may," "can," "believes," "expects," "projects," "intends," "likely,"
similar expressions and any other statements that are not historical
facts, in each case as they relate to ARM, Artisan, the management of
either such company or the transaction are intended to identify those
assertions as forward-looking statements. In making any such
statements, the person making them believes that its expectations are
based on reasonable assumptions. However, any such statement may be
influenced by factors that could cause actual outcomes and results to
be materially different from those projected or anticipated. These
forward-looking statements are subject to numerous risks and
uncertainties. There are various important factors that could cause
actual results to differ materially from those in any such
forward-looking statements, many of which are beyond the control of
ARM and Artisan, including: the impact of general economic conditions
in regions in which either such company currently does business,
industry conditions, including competition, fluctuations in exchange
rates and currency values, capital expenditure requirements,
legislative or regulatory requirements, changes in the tax laws,
interest rates and access to capital markets, the possibility that the
transaction will not close, that the closing may be delayed or that
the companies may be required to modify aspects of the transaction to
achieve regulatory approval; the reaction of customers of ARM and
Artisan to the transaction and economic and political conditions in
the U.K., U.S. and elsewhere. The actual results or performance by ARM
or Artisan could differ materially from those expressed in, or implied
by, these forward-looking statements. Accordingly, no assurances can
be given that any of the events anticipated by the forward-looking
statements will transpire or occur, or if any of them do so, what
impact they will have on the results of operations or financial
condition of ARM or Artisan. ARM and Artisan are under no obligation
to (and expressly disclaim any such obligation to) update or alter
their forward-looking statements whether as a result of new
information, future events or otherwise. More information about
potential factors that could affect ARM's business and financial
results is included in ARM's Annual Report on Form 20-F for the fiscal
year ended December 31, 2003 including (without limitation) under the
captions, "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations," which are on file with
the Securities and Exchange Commission (the "SEC") and available at
the SEC's website at www.sec.gov. For more information and additional
risk factors regarding Artisan, see the information under the captions
"Factors Affecting Future Operating Results" contained in
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained in the Annual Report on Form 10-K for
the fiscal year ended September 30, 2003, the Quarterly Report on Form
10-Q for the quarterly period ended June 30, 2004 filed with the SEC.
ARM is a registered trademark of ARM Limited. Artisan Components
and Artisan are registered trademarks of Artisan Components, Inc. All
other brands or product names are the property of their respective
holders. "ARM" is used to represent ARM Holdings plc (LSE:ARM and
Nasdaq:ARMHY); its operating company ARM Limited; and the regional
subsidiaries ARM INC.; ARM KK; ARM Korea Ltd.; ARM Taiwan; ARM France
SAS; and ARM Consulting (Shanghai) Co. Ltd.; and ARM Belgium N.V.
Contact:
ARM
Tim Score, +44 (0)1223 400537 (Investors)
tim.score@arm.com
Julie Seymour, +44 (0)1223 406169 (Media)
julie.seymour@arm.com
or
Financial Dynamics (for ARM)
Sarah Marsland, +44 (0)20 7831 3113 (Investors)
sarah.marsland@fd.com
or
Text100 Public Relations (for ARM)
Stacy Perry, 415-593-8484 (Media)
stacyp@text100.com
or
Artisan
Rosie Sanford, 408-548-3122 (Investors)
Claudia Natalia, 408-548-3172 (Media)
claudia@artisan.com
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