(Reuters) - Chipmaker Diodes Inc (DIOD.O) said it would buy Pericom Semiconductor Corp PSEM.O in a deal valued at about $400 million to boost its analog and mixed-signal chip businesses.
Pericom shares jumped 37.4 percent to $16.73 in morning trading on Thursday, but stayed shy of Diodes’ offer of $17 per share. Diodes’ stock rose 5.7 percent.
The semiconductor industry has seen rapid consolidation in the recent months, driven by strong demand for cheaper chips and new products to power Internet-connected gadgets.
Pericom makes connectivity, timing and power management chips used in cars, telecom networks and other devices.
Diodes said it would fund the acquisition mainly by drawing down from its existing credit facility, which it recently increased by $200 million.
The deal is expected to close in the fourth quarter of 2015 and immediately add to Diodes’ earnings, the companies said in a statement.
Up to Wednesday’s close, Pericom’s stock had fallen 10 percent this year, Diodes’ had dropped 30 percent.
Bank of America Merrill Lynch is Diodes financial adviser and Sheppard Mullin Richter & Hampton LLP its legal counsel.
Cowen and Company is Pericom’s exclusive financial adviser and Latham & Watkins LLP its legal counsel.
Reporting by Abhirup Roy in Bengaluru; Editing by Savio D'Souza