* Exar Corporation (Nasdaq: EXAR) announced that it has acquired Cadeka Microcircuits. The transaction, which closed on Friday, July 5, 2013, includes $29.0 million in initial consideration to be paid in a combination of cash and stock, and an earn-out against net revenues contributed by Cadeka.
With locations in Loveland, Colorado and both Shenzhen and Wuxi, China, Cadeka designs, develops and markets precision analog integrated circuits for use in industrial and high reliability applications. Cadeka provides precision operational amplifiers, instrumentation amplifiers, comparators, filters and data converter products to a wide array of electronic equipment manufacturers in the medical electronics, aerospace, test and measurement, surveillance and industrial control markets.
* PMC Commercial Trust (AMEX: PCC) is popping higher following an earlier announcement that it has entered into a definitive merger agreement with CIM Urban REIT, LLC and subsidiaries of the respective parties. CIM Urban REIT is a private commercial REIT with Class A commercial real estate assets located in premier urban markets throughout the United States. CIM Urban REIT is managed by a subsidiary of CIM Group, LLC, a real estate and infrastructure investment firm with approximately $12 billion in assets under management. The merger and other transactions were unanimously approved by both PMC Commercial’s Board of Trust Managers and CIM Urban REIT’s Director.
Pursuant to the merger agreement, CIM Urban REIT and its affiliates will receive approximately 22.0 million newly-issued PMC Commercial Common Shares of beneficial interest and approximately 65.0 million newly-issued PMC Commercial Preferred Shares. Each Preferred Share will be convertible into seven Common Shares, resulting in the issuance of approximately 477.2 million Common Shares in the merger and other transactions. This will represent approximately 97.8% of PMC Commercial’s outstanding Common Shares.
All PMC Commercial Common Shares that are outstanding immediately prior to the transactions will remain outstanding following the transactions. In addition, PMC Commercial shareholders of record at the close of the business day prior to the closing of the transactions will receive a special cash dividend of $5.50 per common share, to be paid shortly after closing. The special dividend will be funded from existing cash and credit lines. Based on the agreed equity value of CIM Urban REIT’s contributed portfolio of $2.386 billion and the issuance of 477.2 million PMC Commercial Common Shares, the merged company (including subsidiaries) will have an implied valuation of $2.439 billion. The merged company is initially expected to pay a quarterly cash dividend of $0.175 per common share, which will provide a 3.5% annualized yield on its pro forma equity market capitalization.
After the closing of the merger and other transactions, it is expected that the merged company will primarily invest in substantially stabilized real estate and real estate-related assets in high density, high barrier–to-entry urban markets throughout the United States. CIM Group will manage most aspects of the merged company’s business and it is anticipated that the merged company will be the principal investment vehicle through which CIM Group will place substantially stabilized real estate investments. As a result of CIM Group’s urban market investment and operating experience developed over the last 19 years, the merged company will benefit from investment opportunities in a diverse range of stabilized urban properties (and to a lesser extent loans secured by such properties), including office, retail, hotel, multifamily apartments, signage and parking. Over time, the merged company may expand into new real estate-related activities, supported by CIM Group’s broad real estate investing capabilities. In addition, the merged company will continue to originate loans to small businesses collateralized by first liens on the real estate of the related business, in accordance with the current investment strategy of PMC Commercial and its subsidiaries.
The merger and other transactions are subject to certain customary closing conditions, including the approval of PMC Commercial’s shareholders. PMC Commercial expects to hold a special meeting of its shareholders to consider and vote on the proposed transactions contemplated by the merger agreement. The parties expect the transactions to be completed during the fourth quarter of 2013.
Under the merger agreement, PMC Commercial has the right to solicit competing proposals from third parties during the 30-day period ending August 6, 2013. PMC Commercial does not intend to disclose developments regarding this process, unless PMC Commercial’s Board of Trust Managers reaches a decision regarding any superior proposals that may be made. There is no assurance that this process will result in a superior proposal.
Sandler O’Neill+ Partners, L.P. is acting as financial advisor (and rendered a fairness opinion in connection with the transactions) and Locke Lord LLP is acting as legal advisor to PMC Commercial. DLA Piper LLP is acting as legal advisor to CIM Group.
* Blue Horseshoe announced a collaboration agreement with Microsoft (Nasdaq: MSFT) that includes the acquisition of Blue Horseshoe’s Warehousing for AX (WAX) and Transportation for AX (TRAX) solutions. This technology will help Microsoft accelerate its Microsoft Dynamics AX supply chain management roadmap with plans to make the functionality available to the broader Dynamics AX channel partner and customer community.
Both WAX and TRAX are products within Blue Horseshoe’s Supply Chain Suite for Dynamics AX. These solutions embed industry-specific functionality directly into the business layer of Microsoft’s Dynamic AX architecture to offer identical performance, user-interface, and business logic as Dynamics AX.
The Warehouse Management & Transportation Management capabilities within WAX and TRAX can empower channel partners to focus on delivering packaged, end-to-end, vertical solutions to customers operating businesses in the manufacturing, distribution or retail industries.
* Avnet, Inc. (NYSE: AVT) entered into an agreement to acquire MSC Investoren GmbH (“MSC Group”), a European distributor focused on electronic component distribution, embedded computing technology and display solutions. The agreement details a two-step approach whereby Avnet will acquire a majority interest in MSC Group after regulatory approval has been granted with the intent to acquire the remainder of the company within a short time frame.
MSC Group is a recognized value-added distributor that leverages its unique combination of distribution, production and system integration capability to address the emerging customer demand for more complex electronic products. The company generated revenue in excess of US$450 million in the 2012 calendar year, with embedded computer technology (including display solutions) accounting for almost 50% of its sales.
This transaction, which is subject to customary regulatory approvals, is expected to be immediately accretive to earnings and supports Avnet’s long-term return on capital goal of 12.5 percent.
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