EXHIBIT 99.1 NEWS RELEASE Press Contact: Bob McMullan Chief Financial Officer
GlobespanVirata, Inc. 732-345-7558 GLOBESPANVIRATA ANNOUNCES AGREEMENT TO
ACQUIRE INTERSIL'S WIRELESS NETWORKING PRODUCT GROUP RED BANK, NEW JERSEY -
JULY 15, 2003 -- GlobespanVirata, Inc. (NASDAQ: GSPN), a leading ...
Press Contact: Bob McMullan
Chief Financial Officer
GLOBESPANVIRATA ANNOUNCES AGREEMENT TO ACQUIRE INTERSIL'S WIRELESS NETWORKING
RED BANK, NEW JERSEY - JULY 15, 2003 -- GlobespanVirata, Inc. (NASDAQ:
GSPN), a leading provider of integrated circuits, software, and system designs
for broadband communication applications, announced today that it has agreed to
purchase the Wireless Networking Product Group ("WLAN Business") of Intersil
Corporation (NASDAQ: ISIL) for $365 million in cash and common stock. This
transaction is expected to close prior to the end of the third quarter of 2003,
subject to customary closing conditions.
Intersil's Wireless Networking Product Group has designed and
developed world-class silicon technology for wireless networking applications.
Today, the wireless networking market is experiencing tremendous growth as
virtually every consumer and business product requires high-speed wireless
connectivity to digital content. The WLAN semiconductor market is one of the
fastest growing segments within the overall semiconductor sector. According to
Allied Business Intelligence, worldwide WLAN semiconductor sales are expected to
grow at a 23% compound annual growth rate from 2002 to 2006.
Analysts estimate that revenues for Intersil's WLAN Business will be
approximately $55 million for the second quarter of 2003. The combined revenues
for GlobespanVirata and Intersil's WLAN Business were approximately $446 million
for the twelve months ended March 31, 2003. It is anticipated that the
transaction will be accretive on a non-GAAP (pro forma) basis to
GlobespanVirata's pro forma non-GAAP(1) earnings and earnings per share for the
year ending December 31, 2004.
Armando Geday, President and Chief Executive Officer of
GlobespanVirata, said, "We are excited about the strategic alignment of this
transaction. As a combined company, GlobespanVirata will be well positioned to
use the WLAN Business' technology and leading market position to accelerate our
growth through entering adjacent market segments including the home networking,
consumer electronic networking and wireless data segments. Our leadership
position in DSL combined with the Intersil WLAN Business' leadership position
creates the world's most compelling product offering for the benefit of
consumers and service providers."
Under the terms of the purchase agreement, GlobespanVirata has agreed
to pay Intersil $250 million of cash and $115 million of GlobespanVirata common
stock, subject to a collar on GlobespanVirata's stock price of between $7.4375
and $10.0625. The number of shares issued by GlobespanVirata will be determined
when the transaction is closed. The minimum number of shares to be issued by
GlobespanVirata will be approximately 11.429 million (equivalent to $10.0625 per
share) and the maximum number of shares will be approximately 15.462 million
(equivalent to $7.4375 per share).
Citigroup is acting as financial advisor to GlobespanVirata with
regard to the transaction.
GLOBESPANVIRATA TELECONFERENCE FOR INVESTORS
GlobespanVirata will hold a conference call for investors at 8:30 AM
Eastern Time on July 16, 2003 to discuss the proposed acquisition of the
Intersil WLAN Business. GlobespanVirata will also provide a live webcast of the
conference call through its website at http://www.globespanvirata.com by
following the links to GlobespanVirata's conference call.
(1) GlobespanVirata reports net income (loss) and diluted earnings
(loss) per share on a pro forma non-GAAP basis, which excludes the effects of
non-cash acquisition charges, restructuring and other charges, discontinued
operations, payroll taxes associated with stock options exercised by employees,
and recognition of foreign tax credits, and assumes the conversion of the
$130,000,000 of convertible subordinated notes. A reconciliation of the GAAP and
non-GAAP earnings will be provided when GlobespanVirata discloses its quarterly
and annual financial performance after the transaction closes.
GlobespanVirata will also provide a re-broadcast of the conference
call through the above website links beginning at noon Eastern Time on July 16,
GlobespanVirata is a leading provider of integrated circuits, software
and system designs for broadband applications that enable the high-speed
transmission of data, voice and video over copper telephone lines.
GlobespanVirata has delivered complete high speed, cost effective and flexible
DSL chipset solutions to more than 400 global customers that manufacture
broadband access equipment for businesses and consumers.
GlobespanVirata is one of the world's largest organizations dedicated
to DSL and related broadband technology. The company applies the industry's
longest history in DSL research and development, as well as over 15 years of
field experience, to offer unparalleled customer support and to successfully
bring its proven broadband solutions to market.
GlobespanVirata is headquartered at 100 Schulz Drive, Red Bank, New
Jersey 07701 and can be reached at +1-732-345-7500 or at
www.globespanvirata.com. The GlobespanVirata name and logo are trademarks of
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Except for historical information contained herein, this press release
contains forward-looking information within the meaning of Section 21E of the
Securities Exchange Act of 1934 that involves significant risks and
uncertainties, and is subject to the safe harbors created by this section.
Actual events may differ materially from those projected in these
forward-looking statements. Factors that might cause a difference include, but
are not limited to, risks related to GlobespanVirata's ability to successfully
integrate the WLAN Business into its existing business, the synergies between
the WLAN Business and GlobespanVirata, GlobespanVirata's ability to sell and
support the acquired Intersil WLAN Business products and to integrate those
Intersil employees it hires, the general slowdown in spending in the
telecommunications industry, customer implementation plans, risks of price
competition among DSL and WLAN chip set suppliers, risks of customer loss or
decreases in purchases by significant customers, risks of dependence upon
third-party suppliers, risks of integrating acquisitions, risks due to rapid
changes in the market for DSL chip sets, market acceptance of new products,
ability of leading equipment manufacturers to incorporate our products into
successful products, ability of telecommunication service providers to market
and sell DSL services, uncertainties concerning the continued impact of
competitive products, risks due to limited protection of our intellectual
property, uncertainties concerning continued service of our key employees, risks
of operating in international markets and general market, economic, regulatory
and business conditions. We refer you to the documents GlobespanVirata files
from time to time with the Securities and Exchange Commission, in particular the
most recent quarterly reports on Form 10-Q and annual reports on Form 10-K of
GlobespanVirata. GlobespanVirata undertakes no obligation to revise or update
publicly the forward-looking information contained in this press release for any