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TriQuint-RFMD merger vote Friday: 4 key questions on the biggest deal in Oregon tech history [The Oregonian, Portland, Ore. :: ](Oregonian (Portland, OR) Via Acquire Media NewsEdge) Sept. 03--One of Oregon's biggest tech companies is due to merge this fall with an East Coast rival, combing two wireless chip businesses with a cumulative market value of $7.4 billion. The combination of Hillsboro-based TriQuint Semiconductor and RF Micro Devices is the biggest M&A deal in the history of Oregon tech, topping Danaher's $2.85 billion purchase of Tektronix in 2007. It will have huge implications for the state's economy. TriQuint employs 900 at its corporate headquarters and chip plant, and many of those jobs hang in the balance as the combined company decides whether to maintain its Oregon factory and headquarters. Shareholders vote on the agreement Friday but there's no doubt as to the outcome: Investors love the deal, which the companies say will save $150 million over its first two years. Each company's share price has more than doubled since the two announced the merger in February, driven in part by surging market for the wireless chip technologies they produce. TriQuint's biggest customer is Apple contractor Foxconn, which accounts for roughly a third of its revenue, and TriQuint has had chips in the last several generations of the iPhone. The companies say their combined business will have a more complete portfolio of highly profitable products, while shaving costs on lower-end chips as they eliminate duplicate functions. Many key questions about the deal haven't been answered, but resolution could come soon. With shareholder approval in hand, the deal could close by month's end. Here are key questions that don't have answers: 1. What will the combined company be called? RFMD and TriQuint say they will take a new name following the deal but haven't said what it will be. They're using the placeholder "Rocky Holding" in the interim. 2. Where will the new company be based? The companies said initially that they would maintain a joint headquarters indefinitely, operating in both North Carolina and Hillsboro. Since then, though, they've revised that and said the corporate office may be in an altogether different location: "We are evaluating the business climate of several locations and in this day of global corporations and virtual offices, the headquarters may not be in a single location and is not always where the CEO resides." The companies, which do substantial business with defense contractors, say they are not considering moving their headquarters out of the United States. 3. What will happen to TriQuint's Hillsboro factory? TriQuint and RFMD have said the combined company will have excess production capacity, and have suggested they're likely to close either the Hillsboro fab or one in North Carolina. (Fabs are what chip manufacturers call their factories.) Former Intel manufacturing vice president Steven Grant, who joined TriQuint in 2008, will be the new company's manufacturing chief -- but that doesn't necessarily mean production will be based in Oregon. Investment analyst JoAnne Feeney, who follows TriQuint for ABR Investment Strategy, said that even if the combined company makes a quick decision about which fab to operate it will be "at least a year or two" before either shuts down. "They've got existing customers for the products coming out of those fabs," she said, and it will take time to qualify those products in the winning factory and transfer the work. 4. Is it really a merger? When they announced the deal, TriQuint and RFMD were adamant that the deal was a "merger of equals," with each company's shareholders owning half of the newly created business. They were outraged when financial publications, including Bloomberg and Reuters, described the deal as a takeover of TriQuint by RFMD. But the combined company will be run by RFMD chief executive Bob Bruggeworth (TriQuint's CEO will be non-executive chairman), and subsequent regulatory filings show that TriQuint had been actively shopping itself amid a slumping share price and campaign by activist investors to break up or overhaul the company. Last spring, Reuters argued that "merger of equals" deals are a myth, and that one company almost always emerges in control. RFMD is a much larger company (its second-quarter revenues totaled $316 million, to TriQuint's $230 million), and its CEO will be in charge of the new business. For Oregon, which has been steadily ceding headquarters for years and has just two companies in the Fortune 500, a deal that puts RFMD squarely in control could leach more corporate muscle and homegrown tech from the state. So TriQuint/RFMD's forthcoming headquarters decision, and the decision on the Hillsboro fab, will say a lot about whether this really is a merger of equals -- and a lot about the deal's impact on Oregon. –––– Mike Rogoway; twitter: @rogoway; 503-294-7699 ___ (c)2014 The Oregonian (Portland, Ore.) Visit The Oregonian (Portland, Ore.) at www.oregonian.com Distributed by MCT Information Services |