March 30, 2010 / 11:43 AM / 10 years ago

UPDATE 2-Microsemi to buy White Electronic Designs for $100 mln

* Microsemi to buy White Electronic for $7/shr

* Offer at 28 pct premium to stock’s Monday close

* Says deal to be accretive by $0.08-$0.12/shr in FY11

* White Electronic shares rise 28 pct (Recasts; adds details, updates share movement)

March 30 (Reuters) - Chipmaker Microsemi Corp MSCC.O said it agreed to buy White Electronic Designs Corp WEDC.O for $100 million, net of White Electronic’s projected cash balance, to expand in the defense and aerospace markets.

Microsemi said it will buy White Electronic, which provides multi-chip solutions for defense and aerospace applications, for $7 per share.

The offer price is at a premium of 28 percent over White Electronic’s closing price Monday on Nasdaq.

As of Dec. 31, 2009, White Electronic had $65.4 million in cash and no debt.

Shares of Microsemi were up 2 percent at $16.92, while shares of White Electronic rose 28 percent to $6.97, their highest in about six years, Tuesday morning on Nasdaq.

Microsemi expects the acquisition to be accretive to fiscal 2011 by 8 cents to 12 cents per share and sees significant cost synergies from the deal, it said in a statement.

Microsemi said it will fund the acquisition using cash on hand and there will be no debt incurred. As of Dec. 27, 2009, the company had a cash balance of $234.9 million.

Defense and security is Microsemi’s largest end market and accounted for 39 percent of the company’s most recent fiscal first-quarter revenue.

Some of its other end markets include commercial air and satellites, industrial, medical, mobile connectivity, notebooks and LCD television sets.

The company expects the transaction to close in the third quarter ending June 27.

Reporting by Manasi Phadke in Bangalore

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