RadiSys Corp said Monday that it has agreed to acquire fellow embedded systems vendor Texas Micro Inc for $115m in stock. Texas Micro designs open-system computing platforms for telecommunications, internet and industrial applications and will become a wholly-owned subsidiary doing business as the RadiSys Communications Platforms Division. The move by RadiSys follows its March acquisition of the Artic Communications business from IBM Corp for $23m, and RadiSys says the two purchases give it a boost in becoming a major subsystem supplier to communications equipment manufacturers. The combined company will have an annual revenue run rate of about $200m and RadiSys says the acquisition will be accretive in calendar 2000.
Under the terms of the deal, shareholders of Texas Micro will hand over four of their shares for each share of RadiSys – giving them a 74% premium over Friday’s closing price. The agreement is subject to an adjustment based on the RadiSys stock price at closing, however. If the price is between $32 and $40, the exchange ratio will see a fixed value of $8 per Texas Micro share. If the RadiSys share price is greater than $40, five Texas Micro shares will be exchanged for each RadiSys share. The deal will be accounted for as a pooling of interests and is expected to close in about 90 days. RadiSys shares fell $3 to $31 on Monday, while Texas Micro rose $1.25 to close at $6.125.
