Benchmarq, Unitrode agree to merge

Electronic News, March 9, 1998 by Will Wade

Proposed stock swap would create new $222M manufacturer

Dallas--Benchmarq Microelectronics has announced it will merge with Unitrode in a $135 million stock swap. The agreement will create a $222 million manufacturer dedicated to analog and mixed-signal chips, with an emphasis on power management devices.

"This is a very strong, strategic combination of two companies," said Alan Schuele, president and CEO of Benchmarq. "This will form a new company that has the capability to be the leader in portable power devices."

Dallas-based Benchmarq has a strong presence in power management chips for battery-powered devices. With headquarters in Merrimack, N.H., Unitrode is known for its power management and industrial control devices.

Under the agreement, Unitrode will acquire all outstanding Benchmarq stock, by trading one share of Unitrode stock for each outstanding share of Benchmarq stock. These terms may change if Benchmarq's shares see any major price swings before the deal closes. The new company is not expected to lay off any employees, and Mr. Schuele said there was very little overlap between the two operations. The Texas and New Hampshire facilities will both remain open. A key part of the deal is that fabless Benchmarq will now be able to produce its chips at Unitrode's New Hampshire fab.

"Regardless of how this looks on paper, this is very much a merger of two companies with a great deal of value to contribute to bottom line growth," said Mr. Schuele. "We are very excited about the opportunity."

Kelley MacDonald, VP of corporate communications at Unitrode agreed that the deal was more of a merger than an acquisition. "We have a broad power management experience, but we are not known for battery management. Benchmarq has carved out an admirable position in battery management ICs. Putting the two companies together will strengthen both our offerings," she said. "Technically it's an acquisition, but we see it as a merger of interests that are very complementary."

Unitrode had net sales last year of $177 million, almost four times Benchmarq's sales of $45 million. The two companies began discussions late last year, and cemented the agreement in just a few months. Stock for the new company will continue to be traded under Unitrode's symbol of UTR, but some in the industry have speculated that the company may be known in the future as Benchmarq. Mr. Schuele said a final decision on the name has not yet been made. Mr. Schuele will become president and COO of the company, while Unitrode president and CEO Robert Richardson will assume the title of chairman and CEO.

"The combination of Unitrode and Benchmarq will create a strong market presence in power management and battery management ICs and modules," said Mr. Richardson. "Each company has a well-established competence in complementary technologies."