1. | Title of each class of securities to which transaction applies: |
2. | Aggregate number of securities to which transaction applies: |
3. | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): |
4. | Proposed maximum aggregate value of transaction: |
5. | Total fee paid: |
1. | Amount Previously Paid: |
2. | Form, Schedule or Registration Statement No.: |
3. | Filing Party: |
4. | Date Filed: |
Acquicor Technology Inc.
Proposed Merger with
Jazz Semiconductor, Inc.
November 2006
1
Legal Disclosures and Safe Harbor
The following slide show was furnished to the Securities and Exchange Commission (the “SEC”) on
Schedule 14A by Acquicor Technology Inc. (“Acquicor”) on November 22, 2006.
Acquicor will be holding presentations for certain of its stockholders, as well as other persons who might
be interested in purchasing Acquicor stock, regarding its proposed merger with Jazz Semiconductor, Inc.
(“Jazz Semiconductor”) pursuant to an Agreement and Plan of Merger dated as of September 26, 2006,
by and among Acquicor, Joy Acquisition Corp., a wholly-owned subsidiary of Acquicor, Jazz
Semiconductor and TC Group, L.L.C., as the Jazz Semiconductor stockholders representative as
described in the September 29, 2006 Form 8-K, and exhibits thereto, and the preliminary proxy
statement on Schedule 14A, filed with the SEC on November 20, 2006.
Acquicor and its officers and directors may be deemed to be participants in the solicitation of proxies
from Acquicor's stockholders in favor of the adoption of the merger agreement and the approval of the
merger. Information concerning Acquicor's directors and executive officers is set forth in the publicly filed
documents of Acquicor. Acquicor stockholders may obtain more detailed information regarding the direct
and indirect interests of Acquicor and its directors and executive officers in the merger by reading the
preliminary proxy statement and the definitive proxy statement, once it is filed with the SEC.
ThinkEquity Partners LLC, CRT Capital Group LLC, Wedbush Morgan Securities, GunnAllen Financial,
Inc., the underwriters in Acquicor’s initial public offering, and Paul A. Pittman, a consultant to Acquicor
and formerly a partner of ThinkEquity Partners LLC, may be deemed to be participants in the solicitation
of proxies from Acquicor’s stockholders in favor of the adoption of the merger agreement and the
approval of the merger. Acquicor stockholders may obtain information concerning the direct and indirect
interests of such parties in the merger by reading the preliminary proxy statement and the definitive proxy
statement, once it is filed with the SEC.
2
Legal Disclosures and Safe Harbor (cont.)
In connection with the proposed merger and required stockholder approval, Acquicor has filed with the SEC a preliminary proxy statement
on schedule 14A. Acquicor intends to file with the SEC a definitive proxy statement which will be mailed to the stockholders of Acquicor.
INVESTORS AND SECURITY HOLDERS OF ACQUICOR ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER
RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED MERGER. The definitive proxy statement will be mailed to the stockholders as of a record date to be established for
voting on the proposed merger. Investors and security holders will be able to obtain free copies of the proxy statement, as well as other
filed materials containing information about Acquicor, at www.sec.gov, the SEC’s website. Investors may also access the proxy statement
and the other materials at www.acquicor.com, or obtain copies of such material by request to Acquicor’s Corporate Secretary at: Acquicor
Technology Inc., 4910 Birch Street, #102, Newport Beach, CA
92660.
This presentation, and other statements Acquicor or Jazz Semiconductor may make, including statements about the benefits of the
proposed merger, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, with
respect to Acquicor’s and Jazz Semiconductor’s future financial or business performance, strategies and expectations. Forward-looking
statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “expect,” “anticipate,”
“intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions,
or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” and similar expressions.
Forward-looking statements are based largely on expectations and projections about future events and future trends and are subject to
numerous assumptions, risks and uncertainties, which change over time. Acquicor’s or Jazz Semiconductor’s actual results could differ
materially from those anticipated in forward-looking statements and you should not place any undue reliance on such forward looking
statements. Factors that could cause actual performance to differ from these forward-looking statements include the risks and uncertainties
disclosed in Acquicor’s and Jazz Semiconductor’s filings with the SEC. Acquicor’s and Jazz Semiconductor’s filings with the SEC are
accessible on the SEC’s website at http://www.sec.gov. Forward-looking statements speak only as of the date they are made. Acquicor and
Jazz Semiconductor assume no obligation to update forward-looking statements. In particular, the anticipated timing and benefits of the
consummation of the merger is uncertain and could be affected by many factors, including, without limitation, the following: (1) the scope
and timing of SEC and other regulatory agency review, (2) Jazz Semiconductor’s future financial performance and (3) general economic
and financial market conditions.
3
Table of Contents
Tab
Transaction Overview I
Jazz Semiconductor Business Summary II
Strategy III
Financial Information and Valuation IV
4
Transaction Overview
Acquicor Technology Inc. History
IPO in March 2006
Raised $172.5 million
Approximately $165.9 million held in trust as of June 30, 2006
Founders’ background
Gil Amelio
Chairman and CEO, Apple Computer
Chairman and CEO, National Semiconductor
President, Rockwell Communication Systems
Ellen Hancock
Chairman and CEO, Exodus Communications
EVP and CTO, Apple Computer
EVP and COO, National Semiconductor
SVP, IBM
Steve Wozniak
Co-founder, Apple Computer
5
Transaction Overview
Transaction Summary
Jazz Semiconductor is an independent wafer level manufacturer
primarily focused on specialty analog and mixed-signal processes
Purchase price = $260 million subject to adjustment (all cash)
We have executed a definitive agreement to acquire Jazz Semiconductor’s
business including the Newport Beach fab and an approximate 10% stake in
Shanghai Hua Hong NEC Electronics Co., Ltd. (HHNEC)
Expected to close in 1Q 2007
Financing overview (approximate)
$162 million from Acquicor’s IPO proceeds held in trust
$28 million draw on a $65 million line of credit provided by Wachovia Bank
$80 million in other financing
Acquicor would change its name to Jazz Technologies, Inc. and be
publicly traded
Following the merger, Jazz Semiconductor would be a wholly-owned
subsidiary of Jazz Technologies
6
Transaction Overview
Jazz Technologies’ Projected Team
Jazz Technologies (Parent)
Gil Amelio – Chairman and CEO
Ellen Hancock – President and COO
Steve Wozniak – EVP and CTO
Paul Pittman – CFO and Chief Administrative Officer
Shu Li – SVP and Divisional CEO
Allen Grogan – Chief Legal Officer
George Lauro – VP, Corporate Development
Dan Lynch – VP, Human Resources
Harsha Tank – Controller (currently acting CFO of Jazz Semiconductor)
Jazz Semiconductor (Subsidiary)
Shu Li – President and CEO
Nabil Alali – VP, Newport Beach Operations
Jeff McHenry – VP, Supply Chain Management
Marco Racanelli – VP, Engineering and Technology
Theodore Zhu – Chief Marketing Officer and VP, Sales
Carolyn Follis – General Counsel
7
Jazz Semiconductor Business Summary
Company Overview
World’s leading independent wafer level manufacturer for analog and
mixed-signal semiconductors
800+ employees
Spun-off by Conexant in 2002 in conjunction with an investment by the
Carlyle Group
Current shareholders include Carlyle Group, Conexant, and RF Micro Devices
IP and trade secrets developed over a decade
Substantial body of IP in basic material physics, processes, and device and circuit
design
Leadership position
High switching costs, customer stickiness, limited alternatives
Access to multiple fabs
Newport Beach: 17,000 wafers/month (wholly owned)
Current and planned capex expected to bring total capacity to 19,000 to 21,000 wafers/month,
with enhanced specialty process capabilities
Additional capacity through HHNEC and ASMC in Shanghai
8
Jazz Semiconductor Business Summary
Semiconductor Market Growth Trends
Analog integrated circuits (ICs) growing faster than the overall
semiconductor market
WW sales of semis expected to grow 9.8% in 2006 to $249.6 billion
Analog / mixed signal expected to grow 17.3% in 2006 to $37.4
billion
Semiconductor Market Growth
$215
$228
$299
$255
$250
Source: Semiconductor Industry Association and CIBC World Markets
9
Jazz Semiconductor Business Summary
High-Volume CMOS versus Specialty Foundries
Specialty Foundries
(e.g., Jazz Semiconductor)
(e.g., TSMC, UMC, etc.)
Leading analog products can
be fabricated on .13 micron or
larger
Leading products require
cutting-edge fab equipment
(.09 micron and smaller)
Fab
Equipment
Dense integration of analog
and digital on single IC
performing analog functions
with high performance and
efficiency
IP-focused on accomplishing
digital functions at lowest cost
Technology
Focus
Compete on circuit
performance and efficiency
Compete on number of
transistors/mm2
Basis of
Competitive
Advantage
Small chips (<5mm2)
Large chips (>10mm2)
Chip Size
Analog plus digital
Predominantly digital
Chip
Functions
Specialty fabs
High volume fabs
Foundry Type
High Volume CMOS
Foundries
10
Jazz Semiconductor Business Summary
Blue Chip IC Vendors Use Jazz
Jazz
Offerings
Silicon Germanium
RFCMOS
CMOS
High Voltage CMOS
.35um, .25um,
.18um, .13um
Jazz Customers and Products
WIRELINE
Conexant, Mindspeed, TI
Interface Circuits, D/A, Regulators, etc.
WIRELESS
Freescale, Marvell, RFMD, Skyworks
Radio Frequency Circuits, Mixers,
Mod/Demod, Drivers, Power Amps, etc.
CONSUMER
Conexant, Micro Linear, RF Magic
Radio Frequency Circuits, Mixers,
Mod/Demod, Drivers, Power Amps, etc.
Cell Phones
WiFi
Digital TV Tuners
Wireline Ports
Modems
GPS Receivers
Bluetooth
End
Products
11
Jazz Semiconductor Business Summary
Jazz Products Feed Growing End Markets
Source: CIBC World Markets
12
Jazz Semiconductor Business Summary
Jazz Specialty Processes Enable Unique Products
Specialty processes enable “mixed signal” integration
Combine analog and digital functions on single chip
Product miniaturization
Reduce part count, size, and power consumption
Key enabler to multi-function consumer and portable devices
Set Top Box Tuner – Miniaturization Example (many others)
Legacy Solution
The Jazz Specialty Solution
End Product
Single RFIC using
0.18um specialty silicon
Mechanical metal “can” tuner
Wireless TV reception for HDTV,
PC, and cell phone products
13
Strategy
Phase 1: Strengthen the Core Business
We expect to accelerate Jazz Semiconductor’s efforts to:
Complete in-process capacity expansion in Newport Beach and improve
product mix
Operate the Newport Beach fab more efficiently
Improve ability to allocate production to Chinese partners
We intend to acquire low cost capacity to increase the scale of the
business
We expect to add capacity inexpensively, because:
Specialty processes typically use less advanced operating technology than
CMOS processes (e.g., 130nm vs. 65nm)
Fully-depreciated CMOS fabs provide a sound foundation for specialty fabs
Conversion from standard CMOS to specialty processes is cost effective
With continuing upgrades in the standard CMOS market, fully-
depreciated fabs are expected to continue to be available
14
Strategy
Phase 2: Expand the Platform
Design services front end
Jazz Semiconductor assists customers in getting designs into Jazz
Semiconductor’s foundry more efficiently
Application specific integrated circuit (ASIC) design service
Jazz Semiconductor offers “turn key” custom ASIC service
Designs and fabs ICs to customer specifications
Augment IP libraries / blocks
Target largest, fastest growing applications
Enhance Jazz Semiconductor analog wafer level manufacturing leadership
Products / ICs alternatives
Offer IP blocks in die form
Analog standard products and mixed signal SOCs
Converged systems / solutions over the long term
Products that use ICs fabbed by Jazz Semiconductor
15
Financial Information and Valuation
Summary Historical Financials ($ in thousands)
(1)
Figures shown for 9 months ended 9/30/2006 are unaudited, non-U.S. GAAP numbers which have been adjusted for a non-recurring and non-cash
charge of $17.5 million and $16.3 million at the revenue, gross profit and operating income / (loss) lines, respectively, associated with the termination
of a related party agreement. (See the following page for reconciliation to U.S. GAAP)
(2)
Adjusted EBITDA is not a recognized term under U.S. GAAP and does not purport to be an alternative to net income as a measure of operating
performance or to cash flow from operational activities as a measure of liquidity. (See the following page for reconciliation of Adjusted EBITDA to U.S.
GAAP)
16
Financial Information and Valuation
Adj’d EBITDA and GAAP Reconciliation ($ in thousands)
(1)
Other charges include research and development expense related to the purchase of technology from Polar Fab, a license fee paid to HHNEC for intellectual property
that was determined not to have future value, management fees, stock compensation expense, and income associated with legacy Stock Appreciation Rights and
related warrants, and IPO and merger expense write-off and other non-operating income
(2)
Adjusted EBITDA is not a recognized term under U.S. GAAP and does not purport to be an alternative to net income as a measure of operating performance or to
cash flow from operational activities as a measure of liquidity
17
Financial Information and Valuation
Summary Comparable Company Analysis (1)
(1) Multiples were derived from analysis done by Needham & Company, LLC in preparation of their fairness opinion. (See Acquicor’s
preliminary proxy statement on Schedule 14A filed with the SEC on November 20, 2006, page 64)
18