Under the terms of the deal, Singapore-based Flextronics is to acquire Roseville, California-based IDW in an all-stock transaction valued at approximately $300m. The exchange ratio for the stock swap will be based on Flextronics’ average daily closing price for the 20 days ending on the fifth day before the merger closes.
IDW has the right to terminate the deal if Flextronic’s average share price falls 15% or more below $11.73, and the deal is subject to the usual closing conditions. It is expected to close in the fourth quarter of this year.
Flextronics’ Nasdaq-listed shares closed at $11.77 on Friday and by Tuesday afternoon it was down to $11.60.
IDW specializes in the design and manufacturing of high quality small form factor LCDs for products such as mobile phones, MP3 players, commercial products, and eventually digital cameras.
Flextronics said that upon completion of the deal, it would combine IDW’s LCD operations with Flextronic’s Camera Module Group, TV tuner and WiFi and TFT module assembly operations, to create a new business unit within Flextronics’ Components Division. Flextronics said it will also transition its LCD sourcing to IDW wherever possible.
