Microsemi Corp. said Tuesday it has agreed to acquire PMC-Sierra Inc. in a cash and stock deal valued at about $2.5 billion. Microsemi will pay $9.22 in cash plus 0.0771 of a share per each PMC share through an exchange offer. The price is equal to a 77.4% premium over the closing price of PMC's stock as of Sept. 30, the company said in a statement. "This acquisition will provide Microsemi with a leading position in high performance and scalable storage solutions, while also adding a complementary portfolio of high-value communications products," Microsemi Chief Executive James Peterson said in a statement. The deal is expected to immediately boost Microsemi's earnings and free cash flow, and to generate more than $100 million in annual cost synergies. The deal is expected to close in the first quarter of 2016. Microsemi shares were not yet active in premarket trade, but PMC-Sierra shares were down 9%.
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