UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 24, 2004
(Date of Earliest Event Reported)
RF Micro Devices, Inc.
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(Exact Name of Registrant as Specified in Charter)
North Carolina 0-22511 56-1733461
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(State or Other (Commission File (I.R.S. Employer
Jurisdiction Number) Identification No.)
of Incorporation)
7628 Thorndike Road
Greensboro, North Carolina
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(Address of Principal Executive Offices)
27409-9421
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(Zip code)
(336) 664-1233
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(Registrant's Telephone Number, Including Area Code)
Item 2. Acquisition or Disposition of Assets.
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On May 24, 2004, RF Micro Devices, Inc. (the
"Company") completed its acquisition of Silicon Wave, Inc.
("Silicon Wave"), a privately held, San Diego-based
supplier of highly integrated Bluetooth-Registered
Trademark- solutions for wireless personal area networks.
Pursuant to an Agreement and Plan of Merger, dated
as of April 21, 2004, among the Company, Deere Merger
Corp., a wholly owned subsidiary of the Company, and
Silicon Wave (the "Agreement"), the Company paid
approximately $16.8 million in cash for all outstanding
shares of Silicon Wave capital stock with available cash
on hand. Immediately prior to the closing of the
acquisition, the Company sold all of the shares of Silicon
Wave that the Company had purchased during fiscal 2004 to
an existing Silicon Wave investor group for $6.0 million,
the Company's original cost for these shares. As a
result, the Company paid a net cash consideration of $10.8
million for all Silicon Wave shares not previously owned
by the Company. In addition to the above-mentioned
payment, the Company agreed to pay earn-out consideration
to the former Silicon Wave stockholders upon achievement
of certain revenue goals for the period from April 4, 2004
to April 1, 2006. If the Company's revenue derived from
Silicon Wave products for the period April 4, 2004 to
April 2, 2005 exceeds $6.0 million, it will pay an
aggregate cash amount equal to one-half of the revenue
derived from Silicon Wave products during this period. If
the Company's revenue derived from Silicon Wave products
for the period April 3, 2005 to April 1, 2006 exceeds
$25.0 million, it will pay an additional aggregate cash
amount equal to the revenue derived from Silicon
Wave products during this period up to a maximum of $75.0
million. The acquisition will be accounted for as a
purchase in accordance with Statement of Financial
Accounting Standards No. 141, "Business Combinations" and
Accounting Principles Board Opinion No. 18, "The Equity
Method of Accounting for Investments in Common Stock."
Prior to the Company's acquisition of Silicon Wave,
the Company invested an aggregate of $6.0 million in
Silicon Wave in two installments during fiscal 2004 as
part of a broader strategic relationship between the
companies. In connection with this strategic
relationship, Silicon Wave granted manufacturing
licenses to the Company for its single-chip UltimateBlue-
Trademark- 3000 radio processor and stand-alone
complementary metal-oxide-semiconductor ("CMOS")
Bluetooth radio modem solutions.
In addition, pursuant to the terms of the Company's
previous investments in Silicon Wave prior to the
acquisition of Silicon Wave, the Company was
entitled to designate one person to serve on Silicon
Wave's board of directors upon achieving a greater than
20% ownership interest in Silicon Wave. During
the third quarter of 2004, the Company's second equity
investment in Silicon Wave increased the Company's
ownership interest in Silicon Wave to greater
than 20%. In that regard, from November 2003 until May
2004, William J. Pratt, a director and officer of the
Company, served as the Company's designee on the Silicon
Wave board of directors. Mr. Pratt did not receive any
separate compensation from either Silicon Wave or the
Company for such service and the purchase price paid for
Silicon Wave was based on arms-length negotiations
between the Company and Silicon Wave.
As a result of the Silicon Wave acquisition, the
Company acquired all of the assets and liabilities of
Silicon Wave, including in-process research and
development, and approximately 70 employees have joined
the Company. Silicon Wave's Bluetooth product portfolio
includes integrated single-chip silicon CMOS radio
processors (including the radio modem and digital baseband
functions), as well as stand-alone CMOS radio modem
solutions. The CMOS Bluetooth radio processors do not
require external flash memory or external radio frequency
components, which represents significant advantages in
cost, size and supply chain management versus currently
available solutions.
The Company expects that the acquisition of Silicon
Wave will expand its total addressable product market and
is expected to complement its current position in the
handset market. The Company is currently ramping volume
production of Silicon Wave's Bluetooth components for
handsets manufactured by a tier-one handset maker. The
Bluetooth products will be used to support multiple
additional applications, including headsets, printers and
personal computer peripherals.
The summary of the transaction described above is
qualified by reference to the Agreement, which is attached
as an exhibit to and incorporated by reference into this
report.
This report contains forward-looking statements
that relate to the Company's plans, objectives, estimates
and goals. The Company's business is subject to numerous
risks and uncertainties, including the following:
- The rate of growth and development of wireless
markets;
- The risks associated with the operation of the
Company's molecular beam epitaxy facility, its wafer
fabrication facilities and its other foreign and
domestic manufacturing facilities;
- The Company's ability to attract and retain skilled
personnel and develop leaders for key business units
and functions;
- Dependence on third parties, including wafer
foundries, passive component manufacturers, assembly
and packaging suppliers and test, tape and reel
suppliers;
- Variability in operating results;
- Variability in production yields, raw material costs
and availability;
- Dependence on a limited number of customers;
- Dependence on the Company's gallium arsenide
heterojunction bipolar transistor products;
- The Company's ability to reduce costs and improve
margins in response to declining average selling
prices by implementing innovative technologies;
- The Company's ability to increase production
capacity in a timely fashion in response to
increases in demand for its products;
- The Company's ability to bring new products to
market in response to market shifts and use
technological innovation to shorten time-to-market
for its products;
- Currency fluctuations, tariffs, trade barriers,
taxes and export license requirements and health
and security issues associated with the
Company's foreign operations; and
- The Company's ability to integrate acquired
companies, including the risk that the Company may
not realize expected synergies from its
business combinations.
These and other risks and uncertainties, which are
described in more detail in the Company's most recent
Annual Report on Form 10-K filed with the Securities and
Exchange Commission, could cause actual results and
developments to be materially different from those
expressed or implied by any of these forward-looking
statements.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(a) Financial Statements of Business Acquired.
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The financial information required by this Item 7(a)
has not been included with this filing and will be
filed by amendment to this Form 8-K no later than 60
days after the date that this report must be filed.
(b) Pro Forma Financial Information.
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The pro forma financial information required by this
Item 7(b) has not been included with this filing and
will be filed by amendment to this Form 8-K no later
than 60 days after the date that this report must be
filed.
(c) Exhibits.
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Exhibit No. Description of Exhibit
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2.1 Agreement and Plan of Merger among RF
Micro Devices, Inc., Deere Merger
Corp. and Silicon Wave, Inc., dated
as of April 21, 2004. The Company hereby
undertakes, pursuant to Item 601 (b)(2) of
Regulation S-K, to furnish supplementally
a copy of the Voting Agreement (Exhibit B)
and the Schedule of Exceptions to the SEC
upon request.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned,
thereunto duly authorized.
RF Micro Devices, Inc.
By: /s/ William A. Priddy, Jr.
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William A. Priddy, Jr.
Vice President, Finance
and Administration
and Chief Financial
Officer
Date: June 8, 2004
EXHIBIT INDEX
Exhibit No. Description of Exhibit
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2.1 Agreement and Plan of Merger among RF
Micro Devices, Inc., Deere Merger Corp. and Silicon
Wave, Inc., dated as of April 21, 2004. The Company
hereby undertakes, pursuant to Item 601 (b)(2) of
Regulation S-K, to furnish supplementally a copy of
the Voting Agreement (Exhibit B) and the Schedule
of Exceptions to the SEC upon request.