O2Micro Reaches Definitive Agreement for “Going

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GEORGE TOWN, Grand Cayman, Sept. 30, 2022 (GLOBE NEWSWIRE) — O2Micro International Limited (NASDAQ Global Select Market: OIIM) (“O2Micro” or the “Company”), a world leader in the design, development and marketing of high performance integrated circuits and solutions, today announced that it has entered into an agreement and plan to merge (the “Agreement of Merger”) with FNOF Precious Honor Limited (“Parent”) and Rim Peak Technology Limited, a wholly owned subsidiary of Parent (“Merger Sub”). Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company, with the Company remaining the surviving Company and becoming a wholly owned subsidiary of the Parent Company (the “Merger”), in a transaction involving equity value of the company of approximately $145.9 million. Following the Merger, the Company will become an indirect wholly-owned subsidiary of Right Dynamic Investment Limited (“Holdco”), which will be owned by (a) Mr. Sterling Du, the Managing Director and Chairman of the Board of Directors of the Company, and Mr. Perry Kuo, Chief Financial Officer and Director of the Company (“Management Members”), (b) FNOF Dynamic Holdings Limited (the “Sponsor”, together with the Management Members, the “Consortium” ), and (c) certain shareholders and rolling employees of the Company.

Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each American Depository Share of the Company (each, an “ADS”), representing fifty (50) common shares of the Company, value par value US$0.00002 each (the “Shares”), issued and outstanding immediately prior to the Effective Time, other than the ADSs representing the Excluded Shares (as defined in the Merger Agreement), together with Shares represented by such ADSs, will be canceled and cease to exist in exchange for the right to receive $5.00 in cash per ADS without interest, and each Share issued and outstanding immediately prior to the Effective Time, other than the Excluded Shares, Dissenting Shares (as defined in the Merger Agreement) and Shares represented by ADSs, will be canceled and cease to exist in exchange for the right to receive $0.10 in cash per Share without interest. Pursuant to the terms of the merger agreement, stock-based incentives held by current or former officers, directors and employees of the Company will be cancelled, cashed out or converted into stock incentives of Holdco, as applicable.

The Merger Consideration represents a premium of approximately 68.9% to the closing price of the ADSs on September 19, 2022, prior to the Company announcing receipt of the Consortium’s revised non-binding preliminary proposal letter, and premiums of approximately 42.4% and 38.2% to the volume-weighted average trading price of the ADSs over the 60 trading days and 90 trading days, respectively, prior to and including September 19, 2022 .

The merger will be financed by a combination of (i) cash contribution from the sponsor pursuant to an equity commitment letter, (ii) debt financing to be provided by Credit Suisse AG, Singapore Branch and (iii) rollover of funds own by the members of the management and other rolling stockholders of all the Shares and ADSs beneficially owned by them in the Company.

The board of directors of the Company, acting on the unanimous recommendation of a committee of independent directors established by the board of directors (the “Special Committee”), has approved the Merger Agreement and the Merger, and resolved to recommend that shareholders of the Company vote to authorize and approve the Merger Agreement and the Merger. The special committee negotiated the terms of the merger agreement with the assistance of its financial and legal advisors.

The Merger is currently expected to be completed during the first quarter of 2023 and is subject to customary closing conditions, including the clearance and approval of the Merger Agreement by the affirmative vote of shareholders representing at least two-thirds of the voting rights of the Shares present. and vote in person or by proxy at a general meeting of shareholders of the Company. The Rollover Shareholders have agreed to vote all of the shares beneficially owned by them, which represent approximately 16.9% of the voting rights attached to the outstanding shares at the date of the merger agreement, in favor of the authorization and the approval of the merger agreement and the merger. If completed, the Merger will make the Company private and its ADSs will no longer be listed on the NASDAQ Global Select Market.

Needham & Company, LLC is acting as financial advisor to the Special Committee. Skadden, Arps, Slate, Meagher & Flom LLP is US counsel to the Special Committee.

Gibson, Dunn & Crutcher LLP is US counsel to the Consortium.

Certain legal matters regarding Cayman Islands law are advised by Maples and Calder (Cayman) LLP.

Additional Merger Information

The Company will provide the United States Securities and Exchange Commission (the “SEC”) with a current report on Form 6-K regarding the merger, which will include the merger agreement as an attachment. All parties interested in details regarding the merger are encouraged to review these documents, which will be available on the SEC’s website (http://www.sec.gov).

In connection with the Merger, the Company will prepare and send to its shareholders a proxy statement which will include a copy of the Merger Agreement. In addition, in connection with the Merger, the Company and certain other participants in the Merger will prepare and distribute to shareholders of the Company an Schedule 13E-3 Transaction Statement which will include the Company’s proxy statement (the “Schedule 13E-3”). Schedule 13E-3 will be filed with the SEC. INVESTORS AND SHAREHOLDERS ARE ADVISED TO READ SCHEDULE 13E-3 AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE MERGER AND THE MATTERS RELATED. Shareholders will also be able to obtain these documents, as well as other documents containing information about the Company, the Merger and related matters, free of charge at the SEC’s website (http://www.sec.gov).

This announcement is neither a solicitation of proxy, nor an offer to buy, nor a solicitation of an offer to sell securities, and it does not replace a proxy statement or other documents which may be filed or provided to the SEC if the proposed project proceed with the merger.

About O2Microphone

Founded in April 1995, O2Micro develops and markets innovative power management components for the computing, consumer, industrial and automotive markets. Products include backlighting and battery management.

O2Microphone, the O2The Micro logo and their combinations are registered trademarks of O2Microphone. All other trademarks or registered trademarks are the property of their respective owners.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made pursuant to the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “will”, “expect”, “anticipate” , “future”, “intends”, “plans”, “believes”, “estimates”, “confident” and similar statements. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements involve factors, risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties include the possibility that the Merger may not occur as expected if events occur that result in the termination of the Merger Agreement, if anticipated funding for the Merger is not available for any reason , or if one or more of the various conditions to closing of the Merger are not satisfied or have been waived, and other risks and uncertainties discussed in the Company’s filings with the SEC as well as Schedule 13E-3 and the management proxy circular to be filed by the Company. Further information regarding these and other factors, risks and uncertainties is included in the Company’s filings with the SEC. All information provided in this press release speaks as of the date of the press release, and O2Micro assumes no obligation to update this information except as required by applicable law.

For more information please contact:

Contact information:
Daniel Meyberg
O2Micro-investor relations
[email protected]

Joe Hasset
Gregory Communication
[email protected]

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