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Vitesse to sell Storage Products business and obtains new debt financing.

TELECOMWORLDWIRE-24 August 2007-Vitesse to sell Storage Products business and obtains new debt financing(C)1994-2007 M2 COMMUNICATIONS LTD http://www.m2.com

Vitesse Semiconductor Corporation (Pink Sheets:VTSS), a provider of semiconductor solutions for communications and storage networks, announced on Thursday (23 August) that the company has entered into a definitive agreement to sell a portion of its storage products business to Maxim Integrated Products Inc (NasdaqGS:MXIM), a supplier of analog and mixed-signal products for applications that require real world signal processing.

The sale price is USD63m in cash and potential earn-out payments of up to USD12m in the aggregate, upon achieving certain commercial milestones over the period of Vitesse's fiscal year 2008.

Maxim will acquire Vitesse's Serial Attached SCSI (SAS), Serial Attached ATA (SATA) expander product segments, enclosure and baseboard management devices and certain other assets of Vitesse's Storage Products Division.

Vitesse will retain its RAID-on-Chip (ROC) and Fibre Channel product segments, which had been part of the Storage Products Division and will be integrated into its continuing operations.

The transaction is expected to close in the fourth calendar quarter of 2007.

As a result of this sale Vitesse will discontinue its Storage Products division and anticipates a reduction in operating expenses of approximately USD2.5m per quarter in the first full quarter following the close date. Vitesse said that the company will continue to deliver on its commitments to all customers for all retained products that were previously part of the Storage Products Division.

Vitesse also announced an amount of USD30m in new financing from Whitebox VSC Ltd. The loan will be for four years and will be secured by substantially all of Vitesse's assets. The company is expected to use this financing, along with the sale proceeds, to repay its existing credit facility and to invest in its business.

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Title Annotation:Vitesse Semiconductor Corporation and Maxim Integrated Products Inc.
Publication:Telecomworldwire
Date:Aug 24, 2007
Words:315
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