Integrated Silicon Solution Inc.
Robbins Arroyo LLP: Acquisition of Integrated Silicon Solution Incorporated (ISSI) by Summitview Capital (Private) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of Integrated Silicon Solution (NASDAQ: ISSI) by a Chinese consortium of investors led by Summitview Capital (Private). On March 12, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Summitview Capital will acquire Integrated Silicon. Under the terms of the agreement, Integrated Silicon shareholders will receive $19.25 for each share of Integrated Silicon common stock.
Is the Proposed Acquisition Best for Integrated Silicon and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Integrated Silicon is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $19.25 merger consideration represents a premium of only 16.7% based on Integrated Silicon’s closing price on March 5, 2015. This premium is significantly below the average one-week premium of nearly 40.7% for comparable transactions within the past three years. Further, the $19.25 merger consideration is below the target price of $20.00 set by an analyst at Sidoti & Company LLC on August 26, 2014, and $19.50 set by an analyst at B. Riley & Co on March 5, 2015.
On January 27, 2015, Integrated Silicon reported strong earnings for its first quarter 2015. Specifically, Integrated Silicon reported revenue in the first fiscal quarter ended December 31, 2014 was $80.9 million, compared to $79.1 million in the first fiscal quarter of 2014. GAAP net income in the first fiscal quarter of 2015 was $3.2 million, or $0.10 per diluted share, compared to GAAP net income of $2.8 million, or $0.09 per diluted share, in the September 2014 quarter. Additionally, Integrated Silicon has beat consensus analyst estimates for adjusted EPS in three out of its last four quarters.
In commenting on these results, Integrated Silicon’s President and Chief Executive Officer Scott Howarth remarked, “Gross margins increased sequentially by 70 basis points in the December quarter to the highest level since 2010 on continued cost reductions and the stronger U.S. dollar compared to the New Taiwan dollar. We also continued to extend our design win traction across our end markets as customers transition to more advanced products and higher densities, which aligns with our expanded product portfolio. Also, during the December quarter, we continued to make significant progress on our flash and analog initiatives targeting automotive and industrial customers. Most notably, we broadened our collaborative agreements with Spansion, further expanding our available flash solutions.”
In light of these facts, Robbins Arroyo LLP is examining Integrated Silicon board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Integrated Silicon shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Integrated Silicon shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.