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Filed by Marvell Technology Group Ltd.
Filed pursuant to Rule 425 under the Securities Act of 1933
and Rule 14a-12 under the Securities Exchange Act of 1934
Subject Company: Galileo Technology Ltd.
Commission File No.: 0-30877
The following is a joint press release disseminated by Marvell Technology Group
Ltd. and Galileo Technology Ltd. on October 17, 2000
================================================================================
[Marvell Logo] [Galileo Logo]
Contacts:
George A. Hervey
Marvell Vice President and Chief Financial Officer
Ph: (408) 222-1998
Email: [email protected]
or
Mike Tate
Galileo Chief Financial Officer
Ph: (408) 367-1400 Ext. 244
Email: [email protected]
or
Denise Franklin
Marvell Director of Investor Relations
Ph: (408) 222-2551
Email: [email protected]
or
Chuck Burgess
Abernathy MacGregor Group
Ph: (212) 371-5999
Email: [email protected]
MARVELL TECHNOLOGY GROUP LTD. AND GALILEO TECHNOLOGY LTD. SIGN DEFINITIVE
AGREEMENT TO MERGE
THE COMBINATION CREATES A NEW LEADER IN INTEGRATED CIRCUITS FOR
COMMUNICATIONS
Sunnyvale, Calif. (October 17, 2000) - Marvell Technology Group Ltd. (Marvell)
(NASDAQ: MRVL) and Galileo Technology Ltd. (Galileo) (NASDAQ:GALT) today
announced that their boards of directors have unanimously approved a definitive
agreement under which Galileo will merge with Marvell. The transaction is valued
at approximately $2.7 billion, based on Marvell's October 16, 2000 closing
price.
Under the terms of the merger agreement, Marvell will issue 0.674 shares of its
common stock for each common share of Galileo's stock in a tax-free,
stock-for-stock exchange. As a result, Galileo shareholders and option holders
will receive approximately 32.9 million shares of Marvell stock, or 25% of the
diluted ownership in the combined company in exchange for all the shares and
options of Galileo. The transaction is subject to the approval of shareholders
of both companies and of U.S. and Israeli regulatory agencies. The transaction
is expected to close in the first calendar quarter of next year and will be
accounted for as a purchase. On a pro forma basis excluding the amortization of
goodwill and stock compensation expense, the merger is expected to be accretive
to Marvell's earnings per share upon closing.
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"This transaction is a win-win for customers and shareholders alike. This highly
complementary merger combines two best-of-breed technology companies: a leader
in physical layer communications silicon with a leader in higher layer packet
processing and switching silicon. This combination results in a complete
solution for our customers to quickly deliver next generation systems that are
capable of supporting gigabit and faster data rates," said Dr. Sehat Sutardja,
President and Chief Executive Officer of Marvell.
Galileo is recognized as a market leader in digital communications systems on
silicon for the LAN (Local Area Network), MAN (Metropolitan Area Network), and
WAN (Wide Area Network). Galileo's routing, switching, and systems management
products are incorporated in data communications and telecommunications systems
produced by more than 500 customers worldwide. In the 12-month period ended June
30, 2000, Galileo generated $97.5 million in revenues and profits of $22.7
million. Demonstrating its momentum in the market, Galileo has announced over
100 design wins for its new product families.
Marvell is a leader in providing extreme broadband mixed signal and DSP physical
layer interfaces (or PHYs) to address gigabit and faster data communication
rates. The pending merger expands Marvell's offerings to higher layer
switching/routing and system controller functions, while it gives Galileo access
to world-leading, high-speed serial communications technology that is essential
for its next generation of highly integrated switching fabrics, backplanes, and
system controllers.
"Through this merger, we will immediately have expanded market opportunities for
our combined product portfolios. In particular, this combination brings together
Marvell's industry-leading gigabit Ethernet Alaska PHY technology with Galileo's
Galnet family of advanced Layer 2/3/4/5 switched Ethernet processors. We believe
the combined company will be the only supplier currently shipping both gigabit
PHY and switch ICs, and as a result, we will be uniquely positioned to provide
end-to-end solutions to the exploding worldwide gigabit Ethernet LAN market,"
Sutardja added. "Additionally, Marvell's high-speed mixed signal and digital
signal processing capabilities combined with Galileo's strong system-level
capabilities position us to capture major future communication opportunities in
the MAN, WAN, and SAN markets. With over 500 engineers, the combined company
will have the critical mass to aggressively pursue future opportunities."
Avigdor Willenz, Founder and CEO of Galileo, said, "The union with Marvell
emanates from our close gigabit Ethernet partnership. Through the partnership,
we discovered an amazing corporate culture affinity, extraordinary synergy, and
a shared passion for servicing customers with the most innovative solutions.
With the merger, one-stop shopping for end-to-end solutions for high-speed
networking immediately becomes a reality, while the possibilities for future
product integration in the gigabit, terabit, and optical realms are simply
phenomenal."
Upon completion of the merger, Avigdor Willenz, as Executive Vice President and
General Manager of Galileo Technology Group, a subsidiary of Marvell, will
report directly to Sehat Sutardja and join the Marvell Board of Directors.
Manuel Alba, Galileo's President, will also join Marvell's board. The company,
which will be named Marvell, will be headquartered in Sunnyvale, California.
Galileo will continue operations in both Israel and San Jose, California with
its reporting structure essentially unchanged.
Goldman, Sachs & Co. acted as financial advisor and provided a fairness opinion
to Marvell. Salomon Smith Barney acted as financial advisor and provided a
fairness opinion to Galileo.
Marvell and Galileo will host a conference call on October 17, 2000, at 10:00
a.m. EDT to discuss the merger. The dial-in number for the United States is
888-873-1903 and for international callers is 212-346-0285. A replay will be
available approximately one hour after completion of the call until noon EDT on
October 24, 2000. The replay number for the U.S is 800-633-8284 and for
international is 858-812-6440. The conference call ID number is 16681238. The
conference call also is available via the Web, both live and recorded, at
www.marvell.com.
About Marvell
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Marvell comprises Marvell Technology Group Ltd. (MTGL) and its subsidiaries,
Marvell Semiconductor Inc. (MSI), Marvell Asia Pte Ltd. (MAPL), and Marvell
Japan K.K. (MJKK). On behalf of MTGL, MSI designs, develops, and markets
integrated circuits utilizing proprietary mixed signal and digital signal
processing technologies for broadband communications-related markets. As used in
this release, the term "Marvell" refers to the entire group of companies.
Marvell's proprietary CMSP technology combines custom digital signal processing
algorithms to allow technology customers to store and move digital data on
demand at high data access rates. Marvell initially focused its core technology
on the data storage market. It more recently applied its technology to the high
speed, or broadband, data communications market by introducing products that are
used in network access equipment to provide the interface between communications
systems and data transmission media.
Marvell employs more than 300 people. MSI is headquartered at 645 Almanor Ave.,
Sunnyvale, Calif., 94085; phone: (408) 222-2500; fax: (408) 328-0120.
About Galileo
Galileo Technology Ltd., a market leader in communications systems on silicon,
is one of the semiconductor industry's fastest growing suppliers of complex,
high-performance, integrated circuit devices serving the needs of the LAN, MAN,
and WAN markets. Galileo is organized around two principal product groups:
Internetworking Products, consisting of system controllers and WAN
communications controllers, and Switching Products, which consists of switched
Ethernet controllers and switched PoS/ATM controllers. Galileo's products form
the heart of many advanced communications systems built by leading OEMs, such as
Accton, Alcatel, Cabletron, Cisco Systems, D-Link, Ericsson, Intel, Lucent,
Marconi, Nokia, NBase Communications, and Nortel Networks.
Galileo employs more than 300 people worldwide and has business headquarters in
San Jose, California and R&D headquarters in Manof, Israel. For more information
on Galileo, call 1-888-GALTEK-1 or visit its website at www.GalileoT.com.
Forward-Looking Information:
This press release may contain forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These statements are based on the current expectations or beliefs of
Marvell's and Galileo's management and are subject to a number of factors and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. The forward-looking statements
contained in this release address the strategic business combination of Marvell
and Galileo. The following factors, among others, could cause actual results to
differ materially from those described in the forward-looking statements: the
risk that the Marvell and Galileo businesses will not be integrated
successfully; costs related to the business combination; failure of the Marvell
or Galileo shareholders to approve the business combination; inability to obtain
or meet conditions imposed for governmental approvals for the merger, inability
to further identify, develop and achieve success for new products, services and
technologies; increased competition and its effect on pricing, spending,
third-party relationships and revenues; as well as the inability to establish
and maintain relationships with commerce, advertising, marketing, and technology
providers.
For other factors that could cause Marvell's or Galileo's results to vary from
expectations, please see the "Risk Factors" section of Marvell's Registration
Statement on Form S-1 relating to Marvell's initial public offering, Marvell's
Quarterly Report on Form 10-Q for the quarter ended July 31, 2000, and Galileo's
most recent report on Form 20-F filed with the SEC.
Where You Can Find Additional Information:
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Investors and security holders are advised to read the proxy
statement/prospectus regarding the business combination referenced in these
materials, when it becomes available, because it will contain important
information. The proxy statement/prospectus will be filed with the SEC by
Marvell and Galileo. Security holders may obtain a free copy of the proxy
statement/prospectus, when it becomes available, and other related documents
filed by Marvell and Galileo at the SEC's website at www.sec.gov or at the SEC's
public reference room located at 450 Fifth Street, NW, Washington D.C. 20549 or
at one of the SEC's other public reference rooms in New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. When available, the proxy statement/prospectus
and the other documents may also be obtained by contacting Marvell, Attention:
Denise Franklin, Director of Investor Relations, 645 Almanor Ave., Sunnyvale, CA
94085, (408) 222-2551; and/or Galileo, Attention: Mike Tate, Chief Financial
Officer, 142 Charcot Ave., San Jose, CA, 95131, (408) 367-1400, ext. 244.
Marvell and Galileo and their respective directors, executive officers and
certain other members of management and employees may be soliciting proxies from
stockholders of Marvell and Galileo in favor of the adoption of the merger
agreement. A description of any interests that Marvell's and Galileo's directors
and executive officers have in the merger will be available in the proxy
statement/prospectus.
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[Marvell Logo] [Galileo Technology Logo]
On October 17, 2000, Marvell Technology Group Ltd. and Galileo
Technology Ltd. announced plans to merge. The merger combines Marvell, a leader
in physical layer communications silicon, with Galileo, a leader in higher layer
packet processing and switching silicon.
<TABLE>
<CAPTION>
COMBINING THE COMPANIES
MARVELL GALILEO COMBINED CO.
PRO FORMA
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<S> <C> <C> <C>
Annual Revenue (1) $ 106.9 million $ 97.5 million $ 204.4 million
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Net Income (1) $ 17.8 million (2) $ 22.7 million $ 40.5 million
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Customers 60 500 560
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Employees (at 9/30/00) 320 338 658
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R&D 214 254 468
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Sales & Marketing 38 32 70
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</TABLE>
(1) As of the latest 12-month period ended June 30, 2000
(2) Excludes $5.7 million of stock compensation amortization expense
TRANSACTION SNAPSHOT
<TABLE>
<CAPTION>
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<S> <C> <C>
Deal Structure - Tax-free; Stock-for-Stock Exchange
- Purchase
- 0.674 shares of Marvell common stock for
each share of Galileo common stock
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Closing Date - Anticipated first calendar quarter 2001
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Equity Issuance - Equity issuance of approximately 32.9
million shares
-
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Ownership - 75% by Marvell shareholders
- 25% by Galileo shareholders
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Approvals - Shareholders of both companies
- Hart-Scott-Rodino
- Israeli Regulatory Approvals
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</TABLE>
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