Intersil OKs Deal to Acquire Elantec

Intersil Corp., an Irvine-based maker of chips for communications equipment, agreed Sunday to acquire Elantec Semiconductor Inc. for $1.4 billion in stock and cash to expand its market in Asia.

Intersil will pay 1.24 of its shares and $8 in cash for each share of Elantec, the companies said. Based on Intersil’s closing price of $36.65 Friday, the transaction values Elantec at $53.45 a share, which is 30% more than its closing price of $41.20 Friday.

Intersil is acquiring Elantec, which makes analog integrated circuits for optical storage devices and flat-panel displays, to increase its presence in Asian markets, such as Japan and Korea, company spokesman Brent Dietz said.

“There’s very little overlap in our portfolios,” Dietz said.

“We already share a significant number of customers, and we’re particularly interested in combining our product offering in the Asian market.”

The transaction is expected to close by the end of the second quarter. Credit Suisse First Boston advised Intersil and Robertson Stephens advised Elantec.

Intersil Class A shares rose $2.86 to $36.65 Friday on Nasdaq. They have more than doubled in the last year. Milpitas, Calif.-based Elantec’s shares rose $1.59 to $41.20, also on Nasdaq. They have gained 92% in the last 12 months.

The companies were to announce more details of the transaction today.

In the most recent quarter, Intersil reported net income was $13.3 million, or 12 cents a share, for the period ended Dec. 28, compared with $19.7 million, or 18cents, a year earlier.

Sales for the quarter were $121.6million, compared with $164.8 million.