Analog Device’s $21 bn Acquisition of Maxim Integrated

By Luca Delpippo and Nikunj Agarwal, St Andrews and MIT


Overview of the deal

Acquirer: Analog Devices Incorporated

Target: Maxim Integrated Products Incorporated

Implied Equity Value: $68bn

Total Transaction Size: $21bn

Closed date: Summer 2021

Target advisor: J.P. Morgan served as exclusive financial advisor to Maxim, and Weil, Gotshal & Manges LLP served as legal counsel.

Analog Devices is set to merge with rival semiconductor company Maxim Integrated Products in an $21bn all-stock deal that would create a $68bn company. The deal is expected to close by the end of summer 2021, pending regulatory approval. Analog devices, which is based in Massachusetts, with operations in SIlicon Valley, is offering to pay $78.3 per share for the San Jose based, Maxim integrated, at a rough 13% premium to Maxim’s Wednesday open and 22% premium at the time the deal was announced. Both Analog and Maxim make analogue chips which convert real world signals into electronic ones. Maxim, which was founded in 1983, specialises in chips for cars, healthcare and mobile phones and had $2.3bn in revenue last year, with Analog generating $6bn, half of that coming from industrial clients. The announcement sent an 11% surge in Maxim share price with a 4% drop in Analog’s share price, with investors cautious of the premium being paid to Maxim. The deal would help the companies compete with bigger rivals such as Texas Instruments and reportedly save about $275 million in cumulative costs in years 1 and 2 of the merger, according to Analog devices.

"Both companies have strong engineering and technology know-how and innovative cultures. Working together, we will create a stronger leader, delivering outstanding benefits to our customers, employees and shareholders." — Maxim CEO Tunc Doluca

Company Details: Analog Devices

Analog Devices designs, manufactures and offers a range of products that utilise high-performance analog, mixed-signal and digital signal processing technology, including integrated circuits, software, subsystems and algorithms. They generate the largest portion of their revenue from industrials-sector clients.

Founded in 1965, headquartered in Norwood, Massachusetts

CEO: Vincent Roche (28 Mar 2013-)

Number of employees: 16,400 (2019)

Market Cap: $42.016bn (as of 22/07/2020)

EV: $47.08bn

LTM Revenue: $5.78bn

LTM EBITDA: $2.55bn

LTM EV/Revenue: x8.77


Company Details: Maxim Integrated Products

Founded in 1983 and headquartered in San Jose, California, Maxim Integrated is an American, publicly-traded company designing, manufacturing, and selling analog and mixed-signal integrated circuits. It develops (ICs) for the automotive,