ON Semiconductor buying Quantenna Communications for $1 billion

PHOENIX, AZ and SAN JOSE, CA—ON Semiconductor Corporation and Quantenna Communications announced that they have entered into a definitive agreement for ON Semiconductor to acquire Quantenna for $24.50 per share in an all-cash transaction. The acquisition consideration represents equity value of approximately $1.07 billion and an enterprise value of approximately $936 million, after accounting for Quantenna’s net cash of approximately $136 million at the end of fourth quarter of 2018. The acquisition significantly enhances ON Semiconductor’s connectivity portfolio with the addition of Quantenna’s Wi-Fi technology and software capabilities.

“We are very pleased to welcome Quantenna to ON Semiconductor’s team," said Keith Jackson, ON Semiconductor president and CEO. "The acquisition of Quantenna is another step towards strengthening our presence in industrial and automotive markets. The combination of ON Semiconductor’s expertise in highly efficient power management and broad sales and distribution reach, and Quantenna’sindustry-leadingg Wi-Fi technologies and software expertise creates a formidable platform for addressing fast-growing markets for low-power connectivity in industrial and automotive applications. I am very excited about the opportunity this acquisition creates for customers, shareholders, and employees of the two companies.”

“Today’s announcement is great news for Quantenna employees and customers worldwide," said Dr. Sam Heidari, chairman and CEO of Quantenna. "As part of ON Semiconductor, Quantenna will benefit from a world-class organization in our commitment to providing the best end-user experience for our customers. We are proud of our accomplishments and look forward to a smooth transition with the ON Semiconductor team to pursue exciting new opportunities for Quantenna’s talented employees and reinforce our longstanding position as a leading Wi-Fi technology innovator.”

Following consummation, the transaction is expected to be immediately accretive to ON Semiconductor’s non-GAAP earnings per share and free cash flow, excluding any non-recurring acquisition-related charges, the fair value step-up inventory amortization, and amortization of acquired intangibles.

The transaction is not subject to a financing condition. ON Semiconductor intends to fund the transaction through cash on hand and available capacity under its existing revolving credit facility.

Completion of the transaction is subject to approval by Quantenna’s stockholders, regulatory approvals and other customary closing conditions. The transaction has been approved by ON Semiconductor’s and Quantenna’s boards of directors and is expected to close in the second half of 2019. No approval of the stockholders of ON Semiconductor is required in connection with the proposed transaction.

Morrison & Foerster LLP served as legal advisor to ON Semiconductor. Qatalyst Partners acted as exclusive financial advisor to Quantenna, along with O’Melveny & Myers LLP, who served as legal advisor.

ON Semiconductor is a supplier of semiconductor-based solutions, offering a  portfolio of energy efficient power management, analog, sensors, logic, timing, connectivity, discrete, SoC, and custom devices. The company’s products help engineers solve their unique design challenges in automotive, communications, computing, consumer, industrial, medical, aerospace and defense applications. 

Founded in 2006, Quantenna is a global provider and innovator of high-performance Wi-Fi solutions.