ON buys Quantenna

The Phoenix-based semiconductor manufacturer ON is acquiring Quantenna Communications Inc., a company that claims it has the world’s fastest Wi-Fi for $1 billion in cash.

The acquisition will bolster ON Semiconductor’s connectivity portfolio with the addition of Quantenna’s Wi-Fi technology and software capabilities, said Keith Jackson, ON’s president and CEO.

“The acquisition of Quantenna is another step towards strengthening our presence in industrial and automotive markets,” Jackson said in a statement. “The combination of ON’s expertise in highly efficient power management and broad sales and distribution reach, and Quantenna’s industry leading Wi-Fi technologies and software expertise, creates a formidable platform for addressing fast-growing markets for low-power connectivity in industrial and automotive applications.”

ON announced the acquisition Wednesday afternoon, saying it was buying Quantenna for $24.50 a share, a premium of nearly 20 percent, according to its U.S. Securities and Exchange Commission filing.

Sam Heidari, chairman and CEO of Quantenna, says the acquisition is great news for its employees and customers worldwide.

“As part of ON Semiconductor, Quantenna will benefit from a world-class organization in our commitment to providing the best end user experience for our customers,” Heidari said in a statement. “We are proud of our accomplishments and look forward to a smooth transition with the ON Semiconductor team to pursue exciting new opportunities for Quantenna’s talented employees and reinforce our longstanding position as a leading Wi-Fi technology innovator.”

As of the end of last year, Quantenna had 415 employees, up from 380 a year earlier. It turned a profit of about $3 million in 2018 on $220.5 million in revenue.

ON said the offer represents an equity value of $1.07 billion and an enterprise value of about $936 million, after accounting for $136 million of Quantenna’s cash. The company said it intended to use cash on hand and its existing line of credit to finance the acquisition.

ON expects the deal to close in the second quarter, subject to regulatory approval and a vote by Quantenna shareholders.

ON is the sixth largest Phoenix-area manufacturer, with 1,000 full-time local employees, and 36,000 total employees.