Cypress Semiconductor Corporation Delivers Superior Risk-Adjusted Proposal to Integrated Silicon Solution, Inc. | Cypress Semiconductor
Cypress Semiconductor Corporation Delivers Superior Risk-Adjusted Proposal to Integrated Silicon Solution, Inc.
SAN JOSE, Calif., June 24, 2015 – Cypress Semiconductor Corp. (NASDAQ: CY) today announced that it sent the following letter to the Board of Directors of Integrated Silicon Solution, Inc.
June 24, 2015
Jimmy S. M. Lee
Scott D. Howarth
President and Chief Executive Officer
Integrated Silicon Solution, Inc.
1623 Buckeye Drive
Milpitas, California 95035
Messrs. Lee and Howarth,
On behalf of Cypress Semiconductor Corporation (“Cypress”), I hereby submit our best and final offer for Integrated Silicon Solution, Inc. (“ISSI”) and attach a revised draft Agreement and Plan of Merger between ISSI and Cypress (the “Revised Definitive Merger Agreement”). Cypress is increasing its offer to acquire ISSI to a price of $22.60 per share (the “Revised Offer”), while maintaining its previously outlined ticking fee of $0.10 per share per quarter beginning October 1, 2015. Our strategic and financial analysis indicates this is the maximum price justified for ISSI in order for the deal to create long-term value for our shareholders. Again, we are prepared to put the Revised Definitive Merger Agreement reflecting our Revised Offer, signed by me to demonstrate our sincerity and strong commitment to closing this transaction, into escrow through our lawyers today. We strongly believe that our Revised Offer clearly represents a superior, risk-adjusted proposal to the transaction contemplated by the current Agreement and Plan of Merger (the “Uphill Agreement”) with Uphill Investment Co. (“Uphill”).
Cypress’s Revised Offer demonstrates committed financing, eliminates regulatory risk by agreeing to possible ISSI SRAM divestitures, and includes a ticking fee to compensate for any unforeseen delay in closing. Additionally, we continue to believe that a transaction with Cypress would benefit not only ISSI shareholders, but also ISSI customers due to the increased breadth and strategic capabilities of the product offerings of the combined companies. Conversely, the Uphill transaction continues to be burdened with risks and uncertainties with respect to the:
• Continued existence of a contractual financing out clause for the lender supporting the Uphill transaction,
• Continued complexities of the government-mandated Taiwan divestitures, and
• A potential prolonged investigation by The Committee on Foreign Investment in the United States (“CFIUS”)—the inter-agency committee of the United States Government responsible for reviewing the national security implications of foreign investments in U.S. companies.
As we have noted previously, had we been included in your sale process, your shareholders would have reaped two significant benefits: a more time-efficient price-discovery process and the capture of a potential incremental $0.56 per share per quarter, which was instead misspent on an unnecessary breakup fee. To the extent the ISSI board decides to proceed with the Uphill transaction, and that higher risk transaction faces significant delays or fails to close, Cypress may be interested in acquiring ISSI in the future, but expects that our offer at that time may be substantially below this Revised Offer. Finally, we fully expect that Uphill, with its backing from the Chinese government, will increase its offer price subsequent to the release of this letter, thereby acknowledging and attempting to compensate for the higher level of risk in completing their transaction.
President and Chief Executive Officer
This press release contains certain “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding the Cypress’s offer to acquire ISSI, Cypress’s ability to complete the transaction with ISSI, Cypress’s assessment of antitrust risks, including the timing aspects of such risks, associated with the proposed transaction with ISSI, whether Uphill will increase its offer price and whether Cypress will be interested in acquiring ISSI if the ISSI board decides to proceed with the Uphill transaction. Statements including words such as “believes,” “expects,” or similar expressions are forward-looking statements. Because these statements reflect Cypress’s current views, expectations and beliefs concerning future events, these forward-looking statements involve risks and uncertainties that may affect Cypress’s business or future financial results. These risks include, among others, risks associated with the economy; conditions in the overall semiconductor market; acceptance and demand for Cypress’s products; technological and development risks; legal and regulatory matters and other competitive factors. Risks and uncertainties related to the proposed acquisition of ISSI include, among others, the ultimate outcome of any possible transaction between Cypress and ISSI, including the possibilities that Cypress will not pursue a transaction with ISSI and that ISSI will reject a transaction with Cypress; the risk that if ISSI’s board of directors agrees to negotiate a definitive acquisition agreement with Cypress and Cypress and ISSI enter into a definitive agreement with respect to the proposed transaction, that ISSI’s stockholders do not approve the proposed transaction; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transaction; uncertainties as to the timing of the proposed transaction; competitive responses to the proposed transaction; the risk that regulatory or other approvals required for the proposed transaction are not obtained or are obtained subject to conditions that are not anticipated; the risk that other conditions to the closing of the proposed transaction are not satisfied; costs and difficulties related to the closing of the proposed transaction and the integration of ISSI’s businesses and operations with Cypress’s businesses and operations; the inability to obtain or delays in obtaining anticipated cost savings and synergies from the proposed transaction; unexpected costs, charges or expenses resulting from the proposed transaction; litigation relating to the proposed transaction; the inability to retain key personnel, customers and suppliers; and any changes in general economic and/or industry specific conditions. Additional factors that could cause future results or events to differ from those Cypress expects are those risks discussed under Item 1A., “Risk Factors,” in Cypress’s Annual Report on Form 10-K for the fiscal year ended December 28, 2014, Cypress’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015, and other reports filed by Cypress with the Securities and Exchange Commission. Please read the “Risk Factors” and other cautionary statements contained in these filings. Cypress undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, the occurrence of certain events or otherwise. As a result of these risks and others, actual results could vary significantly from those anticipated in this press release, and Cypress’s financial condition and results of operations could be materially adversely affected.
Cypress (NASDAQ: CY) delivers high-performance, high-quality solutions at the heart of today’s most advanced embedded systems, from automotive, industrial and networking platforms to highly interactive consumer and mobile devices. With a broad, differentiated product portfolio that includes NOR flash memories, F-RAM™ and SRAM, Traveo™ microcontrollers, the industry’s only PSoC® programmable system-on-chip solutions, analog and PMIC Power Management ICs, CapSense® capacitive touch-sensing controllers, and Wireless BLE Bluetooth® Low-Energy and USB connectivity solutions, Cypress is committed to providing its customers worldwide with consistent innovation, best-in-class support and exceptional system value. To learn more, go to www.cypress.com.
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