Magnachip Semiconductor Corp (MX) To Be Taken Private In $1.4 Billion Deal With Wise Road Capital

By Amit Chowdhry ● March 26, 2021
  • Magnachip Semiconductor Corp (NYSE: MX) announced it has entered into a definitive agreement with investment vehicles established by Wise Road Capital LTD in a deal to go private. These are the details.

Magnachip Semiconductor Corp (NYSE: MX), a South Korean leader in display and power solutions, announced it has entered into a definitive agreement with South Dearborn Limited, a company incorporated in the Cayman Islands, and Michigan Merger Sub, a Delaware corporation – which are investment vehicles established by Wise Road Capital LTD and certain of its limited partners.

Under the terms of the deal, Magnachip shareholders will receive $29 in cash for each share of Magnachip’s common stock they currently hold, representing a premium of approximately 75% to Magnachip’s 3-month volume-weighted average share price and approximately a 54% premium to the unaffected closing stock price on March 2, 2021, the last trading day before media reports of third-party interest in acquiring Magnachip. And the all-cash transaction has an equity value of approximately $1.4 billion. The deal is fully backed by equity commitments and not contingent on any financing conditions.

Following the closing of the deal, Magnachip’s management team and employees are expected to continue in their roles, and the company will remain based in Cheongju, Seoul and Gumi, South Korea. The transaction is expected to be seamless for customers and employees across Magnachip’s businesses.

Wise Road intends to work together with Magnachip’s management team to pursue the next step in the company’s growth strategy and transform the Company into a true industry leader in the global display and power markets. And through its additional investment and global network, Wise Road will help Magnachip’s growth internationally. Going forward, Wise Road remains absolutely committed to providing high-quality products and services to the company’s customers while creating a stable environment for the company’s employees to grow and thrive.

The Board of Directors of Magnachip unanimously approved the Agreement and recommends that Magnachip shareholders vote in favor of the transaction. The deal is expected to close during the second half of 2021, subject to customary closing conditions, including the receipt of shareholder and regulatory approvals.

KEY QUOTE:

“This transaction is in the best interests of all of our stakeholders, including shareholders, customers and employees. It will provide an excellent opportunity to accelerate our MX 3.0 growth strategy. Given their deep industry expertise, Wise Road Capital is an ideal partner for Magnachip, and we look forward to working with them as we chart the next phase for our company. We remain grateful to our customers for their trust and to our fellow employees for their unwavering commitment to delivering industry-leading products to customers worldwide.”

— Magnachip’s Chief Executive Officer YJ Kim

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.