M/A-COM Technology Solutions Holdings, Inc. (MACOM) of Lowell, Massachusetts, reported that it has signed a definitive agreement to sell its Automotive business to Autoliv ASP Inc. (Autoliv). MACOM’s Automotive business makes up about 18% of its consolidated revenue in the company’s second fiscal quarter ended April 3, 2015. Autoliv will pay MACOM $100 million in cash, subject to customary working capital and other adjustments. MACOM will have the opportunity to receive up to an additional $30 million in cash based on achievement of earn-out revenue targets through 2019.
John Croteau, president and CEO of MACOM stated, “The divestiture of our Automotive business will enable MACOM to realize its full potential as a pure-play high-performance analog company and demonstrates our confidence in achieving high growth rates in our retained core businesses. We anticipate our optical and laser businesses will continue to outperform, quickly contributing to consolidated MACOM earnings and cash flow consistent with our pre-divestment expectations for our business as a whole, even without the Automotive business in the portfolio.”
MACOM’s Board of Directors has approved the divestiture. The transaction, which is subject to antitrust approvals and other customary closing conditions, is scheduled to be completed in MACOM’s fourth fiscal quarter of 2015.