Friday, May 01, 2015

Omnivision Agrees to Be Acquired for $1.9b

Reuters, Bloomberg: OmniVision announces that it agrees to be acquired by a consortium composed of Hua Capital Management, CITIC Capital, and GoldStone Investment (collectively, the “Consortium”). Under the terms of the agreement,
OmniVision stockholders will receive a total of approximately $1.9 billion. The agreement was unanimously approved by OmniVision’s Board of Directors.

We are pleased to have reached this agreement, which we believe realizes significant value for our stockholders and offers new opportunities for our employees to develop more innovative solutions for customers.” said Shaw Hong, chairman and CEO of OmniVision. “Our Board unanimously concluded that partnering with Hua Capital Management, CITIC Capital and GoldStone Investment was the best choice for OmniVision, as this transaction will provide our stockholders with significant and immediate cash value. Further, Hua Capital Management, CITIC Capital and GoldStone Investment are highly regarded China-based private equity firms with deep experience in the semiconductor industry. With our new partners’ knowledge and insight and the added flexibility that we will have as a private company, OmniVision will be able to focus on reaching the next level of growth, which will benefit our employees, customers and business partners.

We are excited to partner with OmniVision as they embark on this next phase of growth,” said Yue Liu, a managing director at Hua Capital Management. “We believe our unique industry knowledge and operational expertise can help accelerate OmniVision’s presence both in China and globally.

We are very pleased to be making this investment and are excited about the opportunity to work with OmniVision’s outstanding management team. With the strong backing of the consortium and the leadership of the company’s management, we believe OmniVision will continue to be well-positioned to achieve significant growth through its innovative and superior digital imaging technologies and its commitment to building long-term success,” said Yichen Zhang, Chairman and CEO of CITIC Capital.

OmniVision CEO Shaw Hong is expected to remain with OmniVision in the same capacity. The transaction, which is expected to close in the third or fourth fiscal quarter of fiscal year 2016, is subject to approval by OmniVision stockholders, regulatory approvals, including antitrust review in the U.S. and China, review and clearance by the Committee on Foreign Investment in the U.S., clearance or approval under applicable Taiwan law, and other customary closing conditions. In order to obtain clearance or approval under applicable Taiwan law, OmniVision will divest certain of its investments in Taiwan, including certain of its interests in a joint venture.

Update: As usual in public company acquisition cases, a number of law firms start investigations on grounds that the acquisition price is too low and not in shareholders interests. See the PRs of Tripp Levy PLLC, Bronstein, Gewirtz & Grossman LLC, Wolf Popper LLP, Kahn Swick & Foti LLC, Robbins Arroyo LLP, Harwood Feffer LLP, and, probably, some more.

12 comments:

  1. It may be a good move for Omnivision. They need to compete with Sony and Samsung in the long run. Those guys have deep pockets and probably this deal will help prepare Omnivision better against those big companies. The last one year has seen Omnivision and Aptina bought off. Guessing Toshiba and ST imaging will follow suit at some point.

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  2. It's not really a problem of money, OV has a lot of cash. Being a Chinese company doesn't mean that other Chinese companies will adopt automatically your products. Most of Chinese products are still for oversea market.

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  3. This has little to do with competing with Sony, Samsung. OVT will now become a low-margin company servicing Chinese OEMs Xiaomi, Huawei, ZTE and Lenovo, This deal was done more than a year ago. Hong thought he could get more than $27 a share. He waited for value to go up. Never did. Vlad, you can add Rigrodsky & Long, P.A. to your list of firms - offices in Wilmington, Delaware....go figure.

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  4. Rumors says that Hong has used this to deal with Chinese government on his other businesses in China. As in the field of video surveillance cameras, SONY sensors are massively used both in CCD and in CMOS. I don't think that if SONY sensors are better than OV's ones, such Chinese phone makers will switch automatically to OVT. Since the camera quality is the one of the most important sell points. OV is already a "almost" Chinese company in USA, so this handover will not change fundamentally the things.

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  5. Interesting to see if there is enough shareholders supporting this plan. It's still a public company and the board can not decide that this will go trough. They can only recomend that shareholders approve the plan.

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    1. Do public shareholders hold a majority interest in OVTI? If not, a vote may be pro forma. I think there must be more going on here than what one sees at the surface, including the speculation above, but for sure aimed at long term enrichment of the new owners and management team, and China in general. I feel the most sorry for TSMC who did the heavy lifting on bringing up the process used by Omnivision, and who will now see that technology sail across the strait to mainland China (actually, I think that ship already sailed, but now the full loss may be realized.) So, now we (will) have Japan, Korea and China, as the far-east leaders, with the west held by ON-Semi, ST Micro, and Tower-Jazz. ha, Game of Thrones, really.

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    2. No need to feel sorry for TSMC. A large portion of Sony’s stacked sensors are partly manufactured by TSMC as of today and in the future, since Sony cannot afford to develop advanced processes below 45/40nm by itself.

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    3. Winter is coming~

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  6. How OVTI and Galaxycore coexist in China?

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    1. Behind the Hua Capital is the China government. Also, don't forget China is still a communism country, especially only the "Party" can lead the way. I bet sooner or later, Galaxycore will be merged into OVTI or be vanished.

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    2. Have you visited China recently??

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    3. don't you know it is almost impossible to read this blog in China (not Google's fault)

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