Lattice Semiconductor Corp. (Hillsboro, OR) and Advanced Micro Devices (Sunnyvale, CA) today announced a definitive agreement whereby Lattice Semiconductor will acquire Vantis Corp. (Sunnyvale, CA), the wholly-owned programmable logic subsidiary of AMD, for $500 million in cash. The acquisition price includes the assumption of Vantis' net cash and cash equivalents, which are expected to be approximately $60 million at closing. The acquisition will be financed through a combination of cash on hand, bank borrowings and other sources of financing. AMD and Lattice Semiconductor will make a mutual 338(h)10 tax election that will allow acquisition-related goodwill to be tax deductible for Lattice.
Lattice and AMD anticipate completing the deal before the end of Lattice's second fiscal quarter ending in September. The transaction will be accounted for as a purchase. While the transaction will be initially dilutive to Lattice's earnings per share, Lattice expects it to be accretive to the company's cash earnings in calendar 2000. Upon completion of the transaction, Vantis will be a wholly-owned subsidiary of Lattice. Based on pro forma financial results for calendar 1998, the combined revenues of Lattice and Vantis would have been approximately $400 million.
"This is clearly a major strategic move for Lattice," stated Cyrus Y. Tsui, Lattice president and chief executive officer. "With significantly expanded R&D and sales organizations, we will now be able to increase new product development efforts and deliver innovative, higher density programmable solutions to customers sooner. As a result, we will become a stronger and more viable competitor and offer a broader range of programmable devices."
Rich Previte, AMD president and Vantis chairman, said, "We are pleased that the successful Vantis organization will now join a strong Lattice team. The divestiture of Vantis strengthens our balance sheet and allows AMD to focus its investment and resources on its core businesses, which consist of microprocessors and other circuits that enhance the value of personal computers as communications and information processing tools. AMD's best opportunities for profitable growth lie in offering products that provide improved connectivity, a superior visual computing platform, and better Internet access from personal computers."
Lattice designs, develops and markets high performance programmable logic devices ("PLDs") and related development system software. Lattice is the inventor and world's leading supplier of in-system programmable ("ISPTM") PLDs.