RF Micro to buy Sirenza for about $900 mln

(Adds CFO; details from conference call)

By John Tilak

BANGALORE, Aug 13 (Reuters) - Chipmaker RF Micro Devices Inc. (RFMD.O) agreed to acquire Sirenza Microdevices Inc. SMDI.O, a supplier of radio frequency (RF) components, for about $900 million to expand further into the non-cellular, higher-growth RF markets.

The $16.64 per-share deal, which includes $300 million in cash and the rest in stock, represents a 17 percent premium to Sirenza's closing price on Friday, the company said in a statement.

With the acquisition, RF Micro, which has traditionally derived almost all of its revenue by providing chips to handset makers, will get a broader product portfolio that will help reduce dependence on a few large customers.

"This (deal) clearly provides immediate revenue, customer and product diversification," Chief Financial Officer Dean Priddy said by phone.

Apart from bringing in new customers like Boeing Co. (BA.N), Sirius Satellite Radio Inc. (SIRI.O) and ZTE Corp. (000063.SZ) (0763.HK), Sirenza will give RF Micro a foothold in high-growth markets such as broadband, WiMAX, and aerospace and defense, Priddy said.

GOING BEYOND CELLULAR

The acquisition will also form a platform to launch a multi-market products group, which RF Micro said will grow faster than the mobile phone segment in 2008.

CFO Priddy said RF Micro's offering in the multi-markets products division, which essentially targets non-cellular markets, include cable television line amplifiers and power amplifiers for WiMAX applications.

Priddy said in the last quarter, on a pro forma basis, the combined company's multi-market's division would have contributed 23 percent, compared with 77 percent from the cellular segment. RF Micro, as a stand-alone company, had 94 percent revenue from the cellular division.

RF Micro, whose biggest customers include Motorola Inc. (MOT.N) and Nokia (NOK1V.HE), competes with companies including Skyworks Solutions Inc. (SWKS.O) and Anadigics Inc. (ANAD.O).

NOT DONE YET

Priddy said the company was currently looking for small, accretive deals, though a large aquisition may not be round the corner.

The Sirenza deal is expected to add to RF Micro's earnings, before items, within six months of closing, which is seen by the end of the year, the company said.

Priddy said the company has identified "at least $7 million in synergies."

Also, Sirenza CEO Robert Van Buskirk will relocate to North Carolina and will lead RF Micro's new multi-market products group.

Sirenza shares closed up about 9 percent at $15.38 in, while those of RF Micro closed down about 2 percent at $6.07 on the Nasdaq.

(Reporting by Bhaswati Mukhopadhyay, John Tilak in Bangalore)

((Editing by Gopakumar Warrier, Anil D'Silva; Reuters Messaging:bhaswati.mukho.reuters.com@reuters.net; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800)) Keywords: SIRENZA TAKEOVER/RFMICRO

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