Lattice Semiconductor Corp. (LSCC) agreed to buy Silicon Image Inc. (SIMG), the creator of HDMI technology that transmits video between devices, for about $600 million to expand in wired and wireless connectivity products.

Chipmaker Lattice will pay $7.30 in cash for each Silicon Image share, a 24 percent premium to the closing price on Jan. 26, the companies said in a statement today. The combination will generate at least $32 million in annual savings within one year of the transaction, according to the statement.

“We are excited to move forward with Silicon Image and confident we will be able to drive higher revenue and earnings growth, through the benefits of better economies of scale and material cost synergies,” Lattice Chief Executive Officer Darin G. Billerbeck said in the statement. “We expect this transaction to be immediately accretive on a non-GAAP basis.”

The deal will be funded through a combination of cash and new debt financing.

Jefferies is serving as financial adviser to Lattice, with Skadden, Arps, Slate, Meagher & Flom as legal adviser. Barclays Plc is financial adviser to Silicon Image with Fenwick & West as legal adviser.

By: DocMemory
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