Feb. 4 at 9:52 PM
$SITM $RNECY
SiTime to acquire assets of Renesas timing business for
$1.5B, 4.3M shares
SiTime (SITM) and Renesas (RNECY) announced that SiTime and Renesas' consolidated subsidiary, Renesas Electronics America, have signed a definitive agreement whereby SiTime will acquire certain assets related to Renesas' timing business. Additionally, the companies have signed a partnership MOU to explore SiTime's MEMS resonator integration into Renesas' embedded computing products. In the 12 months following the close of the transaction, the business is expected to generate
$300M in revenue. The acquisition is expected to expedite SiTime's progress toward the upper end of its 60%-65% gross margin target while maintaining its targeted long-term annual revenue growth rate of 25%-30%. The acquisition is expected to be accretive to SiTime's non-GAAP earnings per share in the first year post-close. Under the terms of the asset purchase agreement, SiTime will acquire certain assets related to Renesas' timing business for
$1.5B in cash and approximately 4.13M shares of common stock,
$0.0001 par value per share of SiTime, subject to a potential adjustment and a collar determined by the 10-day volume weighted average price as of three trading days prior to the execution of the asset purchase agreement.
The stock consideration will be paid in the form of newly issued SiTime common stock based on SiTime's 10-day VWAP as of three trading days prior to closing, subject to a floor price of
$308.6686 and a ceiling price of
$417.6104. SiTime intends to fund the cash consideration with cash on hand and
$900M of fully committed debt financing from Wells Fargo Bank. SiTime's cash flows, including following the closing of the transaction, are expected to support rapid de-levering to less than 2x within 24 months post-close. The transaction is not subject to any financing conditions. The SiTime and Renesas boards of directors have each unanimously approved the acquisition, which is expected to close by the end of 2026, subject to customary closing conditions and regulatory approvals. Hidetoshi Shibata, CEO of Renesas, will join SiTime's board of directors after the close of the transaction.
