MEMSIC, Inc., a MEMS solution provider, today announced that it has agreed to be acquired by IDG-Accel China Capital II, L.P. and its affiliates MZ Investment Holdings Limited and MZ Investment Holdings Merger Sub Limited, for $4.225 per share in cash. Affiliates of IDG currently hold approximately 19.5 percent of the company’s outstanding common stock. IDG and its affiliates will acquire all the outstanding shares of common stock of MEMSIC that are not currently owned by them, including shares underlying outstanding in-the-money equity awards, for approximately $88.5 million.
The price of $4.225 per share in cash represents a premium of:
143 percent over the $1.74 closing price of MEMSIC’s common stock on November 20, 2012, the last trading day before the company announced that it had received a non-binding proposal from IDG-Accel China Growth Fund II L.P. to acquire the company for $4.00 per share;
144 percent over its average closing share price over the 90 calendar days ended on that date; and
56 percent over the company’s closing share price of $2.71 on April 22, 2013.
The Board of Directors of MEMSIC, in approving the transaction, acted at the unanimous recommendation of a special committee, consisting of the company’s three independent directors, that was appointed in November 2012 to consider the IDG proposal and the company’s other strategic alternatives.
“The Special Committee and its advisors conducted a disciplined and independent process intended to ensure the best available outcome for our stockholders,” said MEMSIC’s Lead Director and Chairman of the Special Committee, Roger Blethen. “The Board of Directors approved the IDG transaction because it strongly believes, after carefully considering the company’s strategic alternatives, that it is in the best interest of MEMSIC stockholders and the best of the available alternatives. We believe the $4.225 price is fair and that making that value available to our stockholders immediately in cash is more favorable to them than the other alternatives available, including remaining independent.”
The company’s Chairman of the Board and Chief Executive Officer, Dr. Yang Zhao, and director Quan Zhou were not members of the Special Committee and did not participate in the deliberations of the Board of Directors approving the merger. Mr. Zhou is an affiliate of IDG. Dr. Zhao will remain employed by the company following the acquisition and will also participate as an equity investor in the acquiring company.
The merger agreement is subject to customary conditions, including a vote of the company’s stockholders. The transaction is expected to close during the third quarter of 2013.
Foley Hoag LLP acted as counsel to MEMSIC. RBC Capital Markets, LLC acted as financial advisor and Richards, Layton and Finger, P.A. acted as special legal counsel to the Special Committee. Skadden, Arps, Slate, Meagher & Flom LLP acted as counsel to IDG.
Headquartered in Andover, Massachusetts, MEMSIC, Inc. provides advanced semiconductor sensor and integrated sensing system solutions based on MEMS technology and mixed signal circuit design. Its products include accelerometers, magnetic sensors and electronic compass solutions, integrated high performance inertial measurement units for industrial and avionics applications, MEMS flow sensing systems, and wireless sensing network systems.