Palo Alto, California-based Canyon Bridge Capital Partners, a newly formed global private equity buyout fund backed by Chinese investors, agreed to acquire Lattice Semiconductor (NASDAQ: LSCC), the biggest tech company in Portland, Oregon, for $1.3 billion in cash, including debt. The $8.30 per share deal delivers a 30% premium to Lattice shareholders.
Lattice Semi provides connectivity solutions powered by low power FPGA, video ASSP, 60 GHz millimeter wave, and IP products to the consumer, communications, industrial, computing, and automotive markets worldwide.
“We are pleased to announce the transaction today with Canyon Bridge, which will unlock tremendous value for shareholders,” said Darin G. Billerbeck, president and chief executive of Lattice. “We are excited to leverage Canyon Bridge’s resources and market connections as we enhance our focus on executing our long-term strategic plan of continued innovation.”
“Lattice’s low-power FPGA franchise, along with its video connectivity and wireless solutions, make it a compelling, strategic investment,” said Canyon Bridge founding partner Ray Bingham. “We expect the company will continue to leverage its existing customer relationships with major OEMs globally, while further broadening the role of its technology solutions and accelerating its strategic plans.”
Bingham has more than 35 years of experience as public company chairman, CEO, CFO and board member directing M&A and private equity investments. He currently serves as executive chairman of Cypress Semiconductor, chairman of Flextronics International, chairman of Trinet and lead independent board member of Oracle Corp. He previously served as managing director at global private equity firm General Atlantic, where he was the co-head of the Menlo Park office and led the firm’s technology investments. He also served as executive chairman, president and CEO and CFO at Cadence Design Systems. He received his B.S in economics from Weber State University and M.B.A from the Harvard Business School.
“Our long-term interests are aligned with Lattice’s employees and customers,” added Canyon Bridge founding partner Benjamin Chow. “We plan to build upon Lattice’s achievements and are excited to provide the resources necessary to help the company achieve significant growth and long-term success.”
Prior to founding Canyon Bridge, Dr. Chow served as a managing director at China Reform Fund Management Ltd., a partner at Beijing Leading Capital, and a managing director at SIG China. At Warburg Pincus Asia, he was in charge of semiconductor investments in North Asia and was an associate at Rustic Canyon Partners, a TMT focused VC fund in Los Angeles. He earned an M.S. and Ph.D. in aeronautics from the California Institute of Technology (Caltech), an M.B.A from the Anderson School at the University of California at Los Angeles and a B.S. in mechanical engineering from UCLA.
The deal has been unanimously approved by both companies’ boards of directors and is expected to close in early 2017 subject to customary closing conditions, regulatory approvals and approval by Lattice’s shareholders.
Founded in 1983 by alumni of Tektronix and Intel, Lattice literally trademarked the term Silicon Forest. “It has never had an easy path, though,” said Oregonian/OregonLive reporter Mike Rogoway.
“Lattice filed for bankruptcy in 1987, revived the business, then withstood a formidable downturn following the dot-com crash. It endured an accounting scandal in 2004 and fired longtime CEO Cyrus Tsui a year later amid shareholder accusations of lavish corporate spending,” he added. “The company’s business rebounded somewhat in recent years by focusing on the low-end of the programmable chip business, but results were uneven and Lattice laid off workers in 2012 and twice last year.”
Upon closing, Lattice will be a standalone subsidiary of Canyon Bridge and Lattice’s senior management team will continue to lead the business from its current headquarters in Portland.
Morgan Stanley & Co. LLC is serving as the sole financial adviser to Lattice and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal adviser. Lazard is serving as the financial adviser to Canyon Bridge and Jones Day is serving as legal adviser.
Photo: Ray Bingham, Founding Partner, Canyon Bridge Capital.