Silicon Storage ends acquisition deal to accept Microchip Tech’s buyout bid

Silicon Storage takes Microchip Tech’s buyout bid

SUNNYVALE, Calif. — Silicon Storage Inc., a maker of flash memory cards used in digital cameras and MP3 players, said Wednesday that it has agreed to be acquired by Microchip Technology Inc. for $273 million in cash.

The company said it has ended its acquisition agreement with Technology Resource Holdings Inc., which is controlled by Prophet Equity LP, as well as some Silicon Storage executives.

Microchip, based in Chandler, Ariz., offered to pay $2.85 per share in cash to acquire Silicon Storage, compared with $2.10 per share from the prior buyer.

Technology Resource also wasn’t buying all the outstanding shares, excluding those held by Silicon Storage CEO Bing Yeh and Chief Operating Office Yaw Wen Hu. The two executives would have swapped their shares for a stake in the new company, which would be privately held.

The boards of Silicon Storage and Microchip have approved the transaction, which is expected to close in the second quarter.

Silicon Storage said it will delay its fourth-quarter earnings report until Feb. 4.

Shares of Silicon Storage, based in Sunnyvale, Calif., rose 16 cents to $2.85 in afternoon trading. Microchip, which makes semiconductors and microcontrollers, added 35 cents to $26.91.