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San Francisco/Taipei (December 5, 2005) - Walden International is pleased to announce the merger between MEGIC Corporation (“MEGIC”) and International Semiconductor Technology Ltd. (“IST”), a listed company on Taiwan Stock Exchange specialized in providing packaging and testing services for driver ICs and smart card modules.
Founded in May 1998 and headquartered in Kaohsiung, Taiwan, IST (www.ist.com.tw) is an affiliate of Compal Group, a large electronics conglomerate in Taiwan. With a forecasted consolidated revenue of US$10 billion for 2005, Compal Group offers a wide variety of electronics products ranging from notebooks, LCD monitors to mobile and telecommunication devices such as PDAs and mobile phones. Currently, IST has a paid-in capital of NT$2.6 billion and 1,500 employees. Major shareholders include Compal Electronics, Inc., China Development Industrial Bank and Taiwan Industrial Bank.
Headquartered in Hsinchu, Taiwan, MEGIC is the third largest gold bumping service provider in the world. Current paid-in capital and headcount are NT$1.4 billion and 500, respectively. Walden International is a seed investor since the Company’s founding in May 1999 and is the largest institutional investor of MEGIC. At present, Walden International holds approximately 26 million shares or 19.22% of MEGIC’s total equity.
Tremendous synergy is anticipated for the merger as MEGIC and IST are complementary in technology, customer portfolio and business scope. With the strength of both companies combined, the new team will be able to further accommodate the explosive growing demand of display driver IC industry by providing turn-key solutions to existing and potential IDM customers. Upon the merger, total monthly production capacity of gold bumping and packaging and testing is expected to reach 180K wafers and 75 million units, respectively, capturing a 25% market share in Taiwan.
Based on the agreement, IST will be issuing 928 million new shares for the acquisition of MEGIC. Stock swap ratio of IST shares to MEGIC shares is 1:1.45. After the effective date of the merger tentatively scheduled in the second half of 2006, the new entity will have a paid-in capital of NT$3.6 billion and Walden International will hold approximately 18 million shares or 5% equity holding. Based on the closing price of IST on December 5, 2005, estimated market capitalization of the new entity is approximately NT$13 billion (~US$384 million).
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