Singapore based Avago Technologies Limited has announced the acquisition of California based LSI Corporation. The deal value of $6.6 billion ,which Avago is planning to pay in cash. This is equivalent to $11.15 per share, which is 41% premium to Friday's closing price of LSI Corporation on NASDAQ.
LSI Corporation was founded under name of LSI logic in 1981 as a semiconductor company. As of now LSI designs and develops semiconductors and software that accelerate the storage in data centre and mobile networks.
Avago Technologies is leading designer and developer of analog and optoelectronics components and sub-system. SilverLake bought Avago from KKR and took public with-in three years. SilverLake sold the holding last year but retained one board seat. This deal is called SilverLake's best deal ever, generating return of over five times the initial investment.
Under terms of the deal, Avago will pay $11.15 per share. Moreover SilverLake will invest $1 billion as convertible notes. These carries a coupon of 2% and conversion price of $48.04 per share. This transaction is expected to strengthen and broaden Avago's product base. Also it is expected to provide economies of scale to the company.
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