Vitesse Completes Sale

Vitesse completes sale of storage products business and closes $30M debt financing

October 30, 2007

1 Min Read
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CAMARILLO, Calif. -- Vitesse Semiconductor Corporation (Pink Sheets:VTSS) today announced that it has completed its previously announced sale of a portion of its storage products business to Maxim Integrated Products, Inc. (Pink Sheets:MXIM). Concurrently, Vitesse completed the funding of the previously reported $30 million loan from Whitebox VSC, Ltd. and also paid in full all amounts outstanding under the existing loans from affiliates of Tennenbaum Capital Partners.

With the closing of these transactions, Vitesse is poised to achieve a leadership position in its core Networking and Ethernet IC market segments,” said Christopher R. Gardner, chief executive officer of Vitesse. “By capitalizing on our strong competitive advantages and utilizing all of our resources — advanced products, technical experts, and stable financials — we are able to support a sustainable and growing business.”

Maxim acquired Vitesse's Serial Attached SCSI (SAS), Serial Attached ATA (SATA) expander product segments, enclosure and baseboard management devices and certain other assets of Vitesse’s Storage Products Division. The products divested accounted for approximately $20 million of Vitesse's consumption during the 12 months ended June 30, 2007. Vitesse will receive approximately $63 million in cash from the sale, along with potential earn-out payments of up to $12 million in the aggregate.

As a result of the divestiture, Vitesse has discontinued its Storage Products Division and anticipates a reduction in operating expenses of approximately $2.5 million per quarter beginning in the quarter ending March 31, 2008. Vitesse will continue to deliver on its commitments to all customers for all retained products that were previously part of the Storage Products Division.

Vitesse Semiconductor Corp.

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