Phoenix: Microsemi Acquires White Electronic Designs

Tuesday, March 30, 2010
Microsemi makes $100M bid for White Electronics
Phoenix Business Journal - by Cathy Luebke

White Electronic Designs, specializing in defense and aerospace technology, is in the sights of California’s Microsemi Corp., which is looking to buy the Phoenix company for $100 million.

Microsemi (Nasdaq:MSCC), a manufacturer of integrated circuits and semiconductors, announced Tuesday that it has signed an agreement to acquire White (Nasdaq:WEDC) for $7 per share. White’s shares gained $1.51 by 10 a.m. Tuesday with the news trading close to that $7 mark. Starting the year at $4.73, shares had moved up and were trading in the the mid-$5 range of late.

In making the announcement, Microsemi points to White’s focus creating a market advantage by the size, weight, and performance of its products and the rapid growth of its anti tamper technology, now required by every major weapon system helping to pinpoint targets using GPS-guided munitions.

White has seen a number of changes over the past few years. After exploring the possibility of putting itself on the sales block, White officials instead chose to exit commercial markets to focus on defense and aerospace. Last August the company appointed former Cubic Corp. executive Gerald Dinkel as CEO filling a position the had been vacant for a year.

At the end of its 2009 fiscal year last September, White had 248 employees, according to its 10-K statement filed with the U.S. Securities and Exchange Commission. For the quarter ended Dec. 31, the company reported a 17 percent jump in revenue to $15.5 million, compared with the previous year. Net income, however, dropped by more than $500,000 to $310,000 on an increase in expenses and discontinued operations.

White Chairman Brian Kahn controls 23.2 percent of White stock, representing a number of equity investors, according to another annual filing. Signia Capital Management LLC holds 10.5 percent of the White Shares and Wynnefield Partners Small Cap Value LP has a 6.1 percent stake.

“The acquisition of White Electronic by Microsemi is designed to deliver excellent value to our shareholders while providing an enhanced platform from which our customers can benefit,” said Kahn in a statement. “As such, our board of directors unanimously approved this transaction.”

The boards of both companies approved the deal, which still must get an OK from White shareholders. Microsemi plans pay cash in the deal rather than seeking financing.

Microsemi officials expect significant cost synergies from the transaction as it exits lower margin businesses, drives a richer product mix and realizes operational and other cost savings in the next six months.

White officials could not immediately be reached for comment.