Acquicor gets Jazzy

Acquicor (AMEX: AQR) in the news again. Woz and gang have agreed to buy Jazz Semiconductor for $260 million, in an all cash deal. Gil Amelio will be CEO of the merged entity. This deal will be put up for approval by the shareholders, and will be completed only if at least 80% votes are in its favour. Jazz Semiconductor, incubated in 2002, is a CMOS wafer manufacturing firm. Numbers: The valuation comes at an EBITDA multiple of 19. Jazz had a net loss of ~15 million in the first half of 2006, hence the EBITDA rather than the P/E.

Acquicor had a webinar conference (recording available on its website) to discuss the merger, in which Jazz claims the main objective behined the acquisition is the access to Acquicor founders' network and to public markets. Gil also touched upon the non GAAP financial measures (adjusted EBITDA) to do the valuation.

I'd posted earlier on Acquicor, just about the time it went IPO. I'm going to watch this company for a while, so you may see more posts about this. My main objective is to understand the functioning of a blank check company, rather than comment on the valuations and other deal aspects.

This 260 million will come partly from Acquicor's trust, part from a line of credit (65M) and part from the selling shareholders (80M) if necessary. This means that Acquicor will have to part with about $ 115 million from its trust account, that had around $ 160 million. Will Acquicor go back to the market to raise more funds, or will it make a smaller acquisition next? This company is definitely on my watchlist.