November 1, 2006 – Vishay Intertechnology Inc., Malvern, PA, has agreed to acquire International Rectifier’s power control systems business for approximately $290 million, to extend its product offerings for high-power and high-voltage discrete semiconductors.
The unit makes planar high-voltage MOSFETs, diodes, rectifiers, and thyristors, power modules (a combination of power diodes, thyristors, MOSFETs, and IGBTs), and automotive modules and assemblies. Vishay stated that the deal will provide a new platform to integrate with its passive components, “creating a new product line through the synergy of passive and semiconductor components.”
The PCS unit posted about $300 million in sales for the 12-month period ended in June 2006, about 26% of total revenues. Vishay says the addition will increase net profit from breakeven to ~$40 million over the next year, and up to about $50 million after two or three years of restructuring. “Our evaluation of the business anticipates a significant reduction of allocations applied against SG&A and manufacturing costs,” according to Vishay, in a statement. “In addition, the potential earnings are based on major synergies predominantly in the area of SG&A as well as manufacturing, purchasing and other overheads.”
For IR, the divestiture enables the company to concentrate resources and assets on its focus products business, which includes high-performance analog, digital, and mixed-signal ICs, as well as other advanced power management products.