Benzinga | Mar 26, 2021 12:18PM EDT

MagnaChip Goes Private In $1.4B All Cash Deal

South Korean display and power solutions provider MagnaChip Semiconductor Corp (NYSE: MX) inked an agreement with investment vehicles established by Wise Road Capital LTD and certain of its limited partners, namely South Dearborn Limited and Michigan Merger Sub, to become a private company in an all-cash transaction of $1.4 billion.

* The cash consideration is equivalent to $29 per share, representing a 54% premium to the March 2 closing price, or the last trading day before media reported third-party interest MagnaChip acquisition.

* MagnaChip's management team and employees would continue their roles with the domicile unchanged in Cheongju, Seoul, and Gumi, South Korea.

* Wise Road intends to transform MagnaChip into a leading player in the global display and power markets. Wise Road would further promote MagnaChip's international growth through additional investment and employing its global network.

* The MagnaChip board had unanimously approved the agreement.

* MagnaChip posted a 14.5% sequential revenue growth, operating income margin of 6.4% in the fourth quarter of FY20 driven by a strong 5G ramp-up and effective cost management as per CEO YJ Kim. Net income and EPS rose 161% and 135% to $17.3 million and $0.4, respectively. The company held cash and cash equivalents of $280 million as of December 31, 2020.

* MX stock has gained 123% in the last year.

* Price action: MX share prices traded higher by 27.9% at $26.1 on the last check Friday.