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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Zoran Corp. (MM) | NASDAQ:ZRAN | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 8.11 | 0 | 01:00:00 |
Zoran
Proprietary and Confidential
Copyright
2011 Zoran Corporation All Rights Reserved
Filed by Zoran Corporation Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: Zoran Corporation
Commission File No.: 000-27246
Date: August 4, 2011
|
Investor
Presentation
August 2011
Zoran Proprietary and Confidential
Copyright
2011 Zoran Corporation All Rights Reserved
|
Zoran
Proprietary and Confidential
Copyright
2011 Zoran Corporation All Rights Reserved
Safe Harbour
Page 3
This presentation does not constitute or form part of an offer to sell or any invitation to purchase or
subscribe for any securities or the solicitation of an offer to purchase, otherwise acquire,
subscribe for, sell or otherwise dispose of any securities or the solicitation of any vote or approval in
any jurisdiction pursuant to the merger or otherwise. Any acceptance or response to the
merger
should be made only on the basis of the information provided in the proxy statement (the Proxy Statement) filed by Zoran with the Securities and Exchange Commission (SEC) for
Zorans stockholder meeting to adopt the merger agreement. The Proxy Statement also includes
the prospectus filed by CSR with the SEC relating to CSR and the CSR ADSs issuable to Zoran
stockholders in the proposed merger. WE URGE INVESTORS TO READ THE PROXY STATEMENT AND PROSPECTUS
AND ANY OTHER RELEVANT DOCUMENTS THAT ZORAN OR CSR FILE
WITH THE SEC, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. Stockholders will be able to obtain, free of charge, copies of the Proxy Statement and any other documents filed by
Zoran with the SEC in connection with the proposed transaction at the SECs website at www.sec.gov
and Zorans website at www.Zoran.com.
Forward-looking statements
This presentation
contains, or may contain, forward-looking statements concerning CSR and Zoran, the
combined companies and business and the wholly-owned subsidiary of CSR
that will merge with
Zoran (together such companies and their subsidiaries being the Merged Company) that are subject to risks and uncertainties. Generally, the words will, may,
should, continue, believes, targets,
plans, expects, estimates, aims, intends, anticipates or similar expressions or negatives thereof identify forward-looking statements.
Forward-looking statements include statements relating to the following: (i) the expected benefits
of the merger, the expected accretive effect of the merger on the combined
companies
financial results, expected cost, revenue, technology and other synergies, the expected impact for customers and end-users, future capital expenditures, expenses,
revenues, earnings, synergies, economic performance, financial condition, and future prospects; (ii)
business and management strategies and the expansion and growth of CSRs or
Zorans
operations and potential synergies resulting from the merger; and (iii) the expected closing date of the merger.
These forward-looking statements are based upon the current beliefs and expectations of the
management of Zoran and CSR and involve risks and uncertainties that could cause
actual results
to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond CSRs and Zorans
ability to control or estimate precisely and include, without limitation: the ability to obtain
governmental approvals of the merger or to satisfy other conditions to the merger on the
proposed terms and timeframe; the possibility that the merger does not close when expected or at all,
or that the companies may be required to modify aspects of the merger to
achieve regulatory
approval; the ability to realize the expected synergies from the transaction in the amounts or in the timeframe anticipated; the potential harm to customer, supplier,
employee and other relationships caused by the announcement or closing of the merger; the ability to
integrate Zorans businesses into those of CSRs in a timely and cost-efficient
manner; the development of the markets for Zorans and CSRs products; the Merged
Companys ability to develop and market products integrating each companys technologies in a
timely fashion; weak current economic conditions and the difficulty in predicting sales, even in the
short-term; factors affecting the quarterly results of CSR, Zoran and the Merged
Company;
sales cycles; price reductions; dependence on and qualification of foundries to manufacture the products of CSR, Zoran and the Merged Company; production capacity; the
ability to adequately forecast demand; customer relationships; the ability of CSR, Zoran and the
Merged Company to compete successfully; product warranties; the impact of legal
proceedings;
the impact of intellectual property indemnification practices; and other risks and uncertainties, including those detailed from time to time under the caption Risk Factors
and elsewhere in CSRs and Zorans periodic reports filed with the United States Securities
and Exchange Commission, including Zorans Current Reports on Form 8-K, Quarterly
Reports on Form 10-Q and Annual Report on Form 10-K and Zorans and CSRs other
filings with the SEC. Neither CSR nor Zoran can give any assurance that such forward-looking
statements will prove to have been correct. The reader is cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
announcement.
Neither CSR nor Zoran nor any other person undertakes any obligation to update or revise publicly any of the forward-looking statements set out herein, whether as a
result of new information, future events or otherwise, except to the extent legally
required.
|
ZORAN
& CSR REPRESENTATIVES
Representative
Current Position
Background
Dr. Levy Gerzberg
President, CEO and Director of Zoran
Co-founded Zoran in 1981
Member of the Consumer Electronics Association
Board of Industry Leaders
Prior experience includes:
Associate Director of Stanford Universitys
Electronics Laboratory
Karl Schneider
Sr. Vice President, Finance and CFO of
Zoran
VP, Finance and CFO since July 1998 (previously
Comptroller since Jan 1998)
Prior experience includes:
Senior Finance / Controller roles at KLA-
Tencor, SCM Micro, Reply Corp, Digital F/X,
Flextronics
Ray Burgess
Director of Zoran
Zoran director since Apr-2005
President & CEO of Solar Power Technologies
(2009-Present)
Prior experience includes:
President & CEO of TeraVicta
CEO of Tao Group
20+ years of experience at Motorola and
Freescale
Joep van Beurden
CEO of CSR
CEO at CSR since November 2007
Prior experience includes:
CEO at NexWave
Canesta, Philips Components, McKinsey &
Co., Royal Dutch Shell
4
Zoran Proprietary and Confidential
Copyright
2011 Zoran Corporation All Rights Reserved
|
Zoran
Proprietary and Confidential
Copyright
2011 Zoran Corporation All Rights Reserved
KEY DEVELOPMENTS SINCE FEB-2011 MERGER ANNOUNCEMENT
Subsequent to the announcement of the Zoran-CSR merger, several developments
had negative
impacts upon Zorans business :
March 2011: Japanese earthquake, tsunami and ensuing nuclear crisis creates
cautious order
patterns in the near-term
April 2011: Cisco, a major customer of Zoran, announced its decision to exit
Flip Video
On 09-May-2011 Zoran announced its Q1 results and provided
revised guidance
Q1 revenues exceeded analyst consensus estimate ($85mm vs.
$83mm)
However,
due
to
the
negative
developments
described
above,
Zoran
guided
its
Q2
revenue
outlook to $80-85mm (compared to a street consensus of $97mm)
On 09-May-2011 CSR publicly indicated that it was evaluating the
implications of Zorans Q2 guidance
CSR and Zoran engaged in additional
reciprocal diligence
Concurrent with CSRs evaluation, Zorans
Board re-evaluated available strategic alternatives
Extensive discussion
around the merits and risks of (1) continuing as a standalone company, (2)
engaging
in
a
break-up
involving
the
sale
of
individual
segments,
and
(3)
a
change-of-control
transaction involving the whole company
5
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Zoran
Proprietary and Confidential
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2011 Zoran Corporation All Rights Reserved
KEY DEVELOPMENTS SINCE FEB-2011 MERGER ANNOUNCEMENT
(CONTD.)
Zoran and CSR engaged in negotiations regarding a potential amendment of the merger
terms
On 16-Jun-2011, Zoran and CSR announced revised deal terms of
$6.26 in cash and 0.589 CSR
shares with an implied value of $9.19 per Zoran
share
At
announcement,
the
revised
deal
value
of
$9.19
per
Zoran
share
was
99.9%
of
the
implied
deal
value of $9.20 under the Feb-2011 deal terms (1.85 CSR shares per Zoran
share)
Additional Information on the Israeli tax issue:
Because of Zorans operations in Israel, all Zoran stockholders could be
subject to Israeli tax
withholding on the gross merger consideration
Zoran has requested tax rulings from the Israeli Tax Authority to provide
exemptions from
tax withholding
for
certain
U.S.
resident
and
other
non-Israeli
stockholders.
The
ITA
has
not
issued any rulings as of 28-Jul-2011
Israeli taxation would apply regardless of the buyer and regardless of the form of
the deal
consideration
Zoran will provide supplemental disclosure when the tax rulings are finalized
6
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Zoran
Proprietary and Confidential
Copyright
2011 Zoran Corporation All Rights Reserved
Offer price for Zoran of $9.19 per share
$6.26 in cash; plus
0.589 CSR ordinary shares per Zoran share
Represents a 1-day premium of 23.4%¹
Total consideration of US$484mm, of which US$313mm in cash and US$171m in
stock
Equivalent to an enterprise value of US$233mm, net of Zorans cash
balance of US$251mm at 31
March 2011, and representing²:
0.6x and 0.5x implied enterprise value / revenues for CY2011E and CY2012E
CY 2012E 8.6x implied enterprise value / EBITDA
CY2012E 38.0x price to earnings ratio
Dr Levy Gerzberg, Co-founder, President and CEO of Zoran to join the CSR Board
as a Non-Executive
Director
Shareholder vote on August 30
KEY TRANSACTION TERMS AT ANNOUNCEMENT
(As of 16-Jun-2011)
7
Source: Zoran Management Revised Forecasts
1. Based on a Zoran closing price of $7.45 of 15-Jun-2011.
2. Based on Revised Forecast (internal plan) per Zoran management.
|
COMPARISON
OF VALUE TO ZORAN SHAREHOLDERS
Initial vs. Amended Deal (As of
16-Jun-2011)
$
9.20
$9.19
$2.93
$6.26
$7.20
$2.00
Implied Deal
Value ($6.26 Cash + 0.589x) on 16-Jun-2011
Zoran Stock Price
Implied Deal Value (1.850x) on 16-Jun-2011
Cash Consideration
(Fixed)
Stock Consideration
8
Zoran Proprietary and Confidential
Copyright
2011 Zoran Corporation All Rights Reserved
The
revised
Zoran-CSR
merger
provides
better
certainty
of
value
to
Zoran
shareholders,
while
retaining
future
upside
from
synergies
through
ownership
in
the
combined
company
|
Zoran
Proprietary and Confidential
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2011 Zoran Corporation All Rights Reserved
Zorans Board, with the assistance of its advisors, undertook a
re-evaluation of Zorans strategic alternatives, including:
Continue
as a standalone entity
Pursue a break-up strategy
Pursue a change-of-control transaction for the whole company (including a
merger with CSR)
Zorans
Board
evaluated
a
range
of
potential
buyers
for
the
individual
segments
as
well
as
for
the
whole
company
within the
parameters of the Feb-2011 merger agreement with CSR
Since the Feb-2011 deal announcement, no third-party proposals have been
received for any of the individual segments or
for the whole company
Key factors evaluated by the Board included:
Near-term and long-term value of alternatives
Execution risk
Timing
Certainty of value
Exposure to business risks (customer, employee, etc.)
Zoran and its advisors conducted negotiations with CSR:
Reciprocal diligence conducted to re-evaluate the business and financial
outlook of both companies
Certain Zoran shareholders indicated that increased
value certainty through a greater cash component of consideration
would be
preferable
As a result, Zoran and CSR reached an agreement to amend deal
terms to $6.26 in cash and 0.589 CSR shares per Zoran share,
equivalent to
$9.19 in consideration as of 16-Jun-2011
Zoran evaluated this offer
relative to the value and other factors associated with Zorans alternatives
Majority of the Board decided the amended deal was in the best interests of Zoran
shareholders
Zoran continues to believe that a merger with CSR is the best
alternative for its shareholders,
given
both
the
value
of
the
CSR
deal,
relative
to
other
alternatives,
and
the
relative
certainty
of
the CSR deal
OVERVIEW OF ZORAN BOARD PROCESS
Merger with CSR is the Best Alternative for Shareholders
9
|
OVERVIEW
OF ZORAN / CSR NEGOTIATION
Source: Background Section of Zoran Merger Proxy
Filed 06-Jul-2011 As Part Of CSR F-4
10
29-May-2011
The Zoran board
expressed that the
preliminary proposal
does not reflect
Zorans value on a
standalone basis
03-Jun-2011
Revised offer from
CSR consisting of
$6.00 in cash, 0.371
CSR shares and a
contingent value right
10-Jun-2011
Revised proposal from
CSR with an implied
value of $9.00,
consisting of $6.00 in
cash and 0.585 CSR
shares
27-May-2011
CSR preliminary
proposal of $6.00 in cash
and 0.371 CSR shares
equaling approximately
$8.25
30-May-2011
In a call between
Goldman Sachs and
JPMorgan, Goldman
Sachs indicated that
Zorans management
would be willing to
take back to Zorans
board a revised offer
at the value implied by
the original merger
agreement of
approximately $11
06-Jun-2011
At the conclusion of
the Zoran board
meeting, the board
expressed that they
would be prepared to
approve an offer with
an implied value of
$9.71 and directed
management and
Goldman Sachs to
communicate a
counteroffer to CSR
consisting of $7.50 in
cash and an
exchange ratio of 0.4
CSR ordinary shares
per share of Zoran
common stock, for a
total implied value of
$9.71
11-Jun-2011
Differing views among
the members of the
Zoran board, although
all of the members
agreed that the
current revised
proposal is not
acceptable.
11-Jun-2011
CSR increases its
offer to $9.25. Upon
conclusion of the
conversation, Mr. van
Beurden
acknowledged that Dr.
Gerzberg would revert
to his board with a
proposal of $9.26
.
12-Jun-2011
CSR indicated that
$9.26 per share is
final and best
offer
12-Jun-2011
After a discussion on
CSRs most recent
proposal, the Zoran
board instructed Dr.
Gerzberg and Zorans
advisors to make a
counteroffer at $9.50
12-Jun-2011
The Zoran board
determined, by a vote
of four directors voting
in favor and three
against, to accept
CSRs latest revised
proposal, opting for
the alternative of
$6.26 in cash
consideration and
$3.00 in CSR stock
16-Jun-2011
The Zoran board (with
Messrs. Castor, Fuller
and Smith voting
against) approved and
declared advisable the
merger and the
amended merger
agreement as being in
the best interests of
Zoran and its
stockholders
May
June
Zoran Proprietary and Confidential
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2011 Zoran Corporation All Rights Reserved
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Zoran
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2011 Zoran Corporation All Rights Reserved
QUALITATIVE COMPARISON OF ZORANS ALTERNATIVES
Merger with CSR is the Best Alternative for Shareholders
Current
Transaction
Standalone
Illustrative
Break-Up
Risk in Execution of
Alternative
Low
High
High
Delivers Scale and Critical
Complementary Capabilities
Yes
No
No
Certainty of Value
Yes
?
No
Upside from Synergy
Potential
Yes
No
No
Near-Term Value
Recognition
Yes
No
No
Minimizes Disruption to
Customers and Employees
Yes
?
No
11
In light of the risks associated with the other alternatives, Zoran continues to
believe that a
merger with CSR is the best alternative for its
shareholders
|
Merger
with CSR provides upfront value and more certainty to shareholders on a
shorter timeline and is not subject to execution risks inherent in a
break-up
Impact on value from dis-synergies
Salability of business segments
ANY PARTIAL OR FULL BREAK-UP SCENARIO WOULD INVOLVE
SIGNIFICANT RISK
12
Creates significant execution risk and results in uncertain
value with prolonged timing
A shutdown of one or more segments or a break-up and sale of all segments poses
significant risk:
Zoran Proprietary and Confidential
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2011 Zoran Corporation All Rights Reserved
|
Overview
of
Dis-Synergies:
Zoran
believes
that
there
are
significant
dis-synergies
in
either
a
break-up
or
a
partial
shutdown
scenario which could create significant value diminution as the dis-synergies
would need to be absorbed either by an acquiring
entity or by the remaining
segments:
Revenue loss from customer disruption / cancellations and employee
uncertainty
COGS increases due to reduced wafer volume
R&D increases due to physical design expenses, IT costs and IP that are
currently shared across segments
Increased in S&M expenses which are
currently shared (local sales offices, trade show expenses etc.)
Increased
G&A expenses due to duplication of support infrastructure in each segment
Impact
on
Sale:
Assuming
a
segment
is
sold,
some
of
the
dis-synergies
could
be
offset
by
synergies
of
the
acquirer,
but
it
is
not
certain whether an acquirer will be prepared to pay Zoran for available
synergies
Impact of Restructuring
:
Assuming
a
segment
is
shut
down
or
sold,
dis-synergies
would
need
to
be
reallocated
to
the
remaining
businesses, thereby having a negative impact on the profitability of the remaining
entity
Impact
on
Cash:
Cash
balance
of
$241mm
as
of
Q211
equivalent
to
$4.82 per
share
Expected
cash
balance
in
the
near-term
between
$4
-
$5
per
share
which
will
be
further
exacerbated
by
any
shutdown
costs
incurred due to restructuring and due to lower profitability in any break-up
scenario
IMPACT ON VALUE FROM DIS-SYNERGIES IN A PARTIAL OR FULL
BREAK-UP IMPEDES SALABILITY AND REDUCES PROFITABILITY
13
Dis-synergies in any break-up of Zoran will likely negatively impact the
profitability, and hence the value, of its segments
Note: Refer to page 18 for additional detail
Source: Zoran Management Revised Forecasts, Dis-synergy estimates per Zoran
Management
1. Based on 50mm basic shares outstanding as of Jul-2011.
Zoran Proprietary and Confidential
Copyright
2011 Zoran Corporation All Rights Reserved
2011E Segment Financials
Status Quo
Zoran
HE
Mobile
Imaging
Zoran
Dis-Synergies
(Incl. Dis-Synergies)
Revenue
$
193
$
131
$
64
$
388
$
388
COGS
$
110
$
68
$
9
$
187
$
18
$
205
Gross Profit
$
83
$
63
$
55
$
201
$(18)
$
183
% Margin
43%
48%
86%
52%
47%
Opex
$
123
$
66
$
34
$
223
$
6
$
229
Operating Profit
$(41)
$(3)
$
21
$(22)
$(24)
$(46)
% Margin
(21)%
(2)%
33%
(6)%
(12)%
1
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Zoran
Proprietary and Confidential
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2011 Zoran Corporation All Rights Reserved
Failure
to
sell
all
segments
would
create
a
highly
unattractive
stub
with
significantly
reduced
profitability
and
impaired
future
prospects
Uncertain whether Zoran can find suitable buyers, who are willing to pay attractive
values for each of its segments, in
light of the market check conducted
prior to signing the original agreement in Feb-2011
Of 7 potential buyers
that were contacted
5 expressed no interest
1 expressed interest, but was focused on acquiring Zorans engineers, not
business segments
1 put forth a $14/share offer but withdrew the offer within 2
days. Although the buyer expressed interest in the
cameras segment, no formal
offer was put forth
No
inbound
interest
was
received
for
either
the
whole
company
or
any
of
the
individual
segments
since
the
announcement of the original merger agreement in Feb-2011
There is significant uncertainty about how quickly all of Zorans segments can
be sold at attractive values in a break-up
scenario
It is possible that all segments may not be sold concurrently, thereby resulting in
certain segments operating at reduced
scale and lower profitability for
prolonged periods of time thereby generating negative cash flow and impairing value
SALABILITY OF ALL
SEGMENTS IN AN EXPEDITED
MANNER AND AT AN
ATTRACTIVE VALUATION
IS UNCERTAIN
14
|
Zoran
Proprietary and Confidential
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2011 Zoran Corporation All Rights Reserved
Combines complementary technologies that underpin next-generation devices
CSRs connectivity and location technologies combined with Zorans
imaging and video
processing strengths provide a unique opportunity to
offer advanced platform solutions to
customers of both companies
Exciting potential for combined product solutions
Creates new growth opportunities within global consumer markets such as internet
enabled,
location-aware digital cameras and the next generation of home
entertainment products and
peripherals
Significant long-term revenue synergies
Selected examples include BT-LE remote control / 3D glasses, WiFi connected
TV, WiFi
and BT enabled Cameras and Printers, Wireless Speakers,
Geo-Tagging and Automotive
Infotainment
Preliminary
product
roadmap
has
generated
positive
feedback
from
existing
blue-chip
customers
of
both
companies
Selected customers include Samsung, Sony, Panasonic, Nikon, LG, Pioneer,
Continental and
Harman Becker
Larger, stronger and more diversified company
Broader scale and global reach
Provides a step change in the addressable markets of both companies
Diversifies revenue base by customer, technology and end-market
CSR IS THE BEST MERGER PARTNER FOR ZORAN
Strong Business Fit
15
Complementary technologies, such as connectivity and location, coupled with the scale
of
the combined company will strengthen Zoran and mitigate competitive
threat
|
Zoran
Proprietary and Confidential
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2011 Zoran Corporation All Rights Reserved
Merger with CSR provides Zorans shareholders 17% ownership in the combined
company
and
an
opportunity
to
benefit
from
both
revenue
and
cost
synergies
Expected to yield significant cost and opex synergies
$50mm of synergies across the combined group underpinned by two months of detailed
integration planning
$35mm
of
synergies
are
expected
from
a
reduction
in
operating
expenditures
and
$15mm
from cost of goods sold
Additional $20mm of cost reductions through rightsizing
Expected to provide over 15% EPS accretion in 2012 (excluding potential revenue
synergies)
Upside to Zoran shareholders through ownership in the combined
company
CSR IS THE BEST MERGER PARTNER FOR ZORAN (CONTD.)
Strong Financial Profile
16
|
Zoran
Proprietary and Confidential
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2011
Zoran
Corporation
All
Rights
Reserved
Vote FOR the Zoran-CSR merger and maximize the value of your investment
CONCLUSION
17
Zoran
s Board has evaluated all
possible alternatives including Zoran
s standalone prospects, a
break
-up of the Company and a
change
-of
-control transaction
Merger
with
CSR
provides
attractive
total
consideration,
upfront
value
and
greater
certainty
to
Zoran shareholders
A CSR transaction can be concluded on a shorter timeline and is not
subject to execution risks
inherent in a standalone or
break
-up strategy
No buyers have emerged for either the whole Company or for any of the
segments
A
merger
with
CSR
creates
a
larger,
more
diversified
company
with
significant
revenue
and
cost
synergies;
Zoran
shareholders
benefit
through
their
ownership
in
the
combined
company
|
Zoran
Proprietary and Confidential
Copyright
2011 Zoran Corporation All Rights Reserved
Appendix
|
Zoran
Proprietary and Confidential
Copyright
2011 Zoran Corporation All Rights Reserved
SELECTED ANALYST COMMENTARY
We believe that the acquisition of Zoran by CSR is a positive event for
shareholders. We believe that some
upside in the share price of Zoran exists
given the big premium between the current stock price and the deal
price.
We believe that, considering the recent performance of Zoran, fi
nding a new home even if at a
reduced price is still the best outcome for Zoran shareholders than the alternative
of going on its own
with a new strategy
and potentially new management.
Lazard, 17.Jun.2011
While we had thought Zorans Board of Directors would have likely not
approved a lower implied offer
price of an all-stock transaction, we view
the revised terms of the pending acquisition as a positive for
Zoran
shareholders as the $313MM cash consideration greatly limits the downside risk of an all-stock
transaction.
While
both
Boards
have
approved
the
merger
terms,
it
still
requires
shareholder
approval
of
both
companies. We believe this is likely given that, for Zoran shareholders, the new
terms include $6.26 in cash
per share versus the prior offer which was an
all-stock transaction and for CSR shareholders the terms are
better as
the dilution is less.
Wedbush, 17.Jun.2011
Net
of
$251M
in
cash,
the
enterprise
value
of
$233M
represents
a
valuation
of
0.65x
EV/Forward
Sales,
which
is
well
below
its
peer
group
average
of
1.5-2.0x,
which
we
feel
is
appropriate
Our
$6
PT
is
based
on
0.1x
EV/Forward 2011 Sales. Our 0.1x EV/Sales multiple represents a significant discount
to its peer group
average of 2.0-2.5x, which we feel is appropriate given
the company's exposure to slowing consumer
demand and share loss particularly
within LCD TVs, and ongoing cash burn
.
Collins Stewart, 17.Jun.2011
Note: Permission to use quotes neither sought nor obtained
|
Zoran
Proprietary and Confidential
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2011 Zoran Corporation All Rights Reserved
The break-up analysis conducted by Zoran management assumes the various segments
operate as standalone, private
entities.
COGS:
COGS increases across all segments due to a reduction in wafer volume driving
increased manufacturing costs
OPEX:
R&D increases due to the need for duplication of shared IP, physical design
costs, IT costs, etc.
S&M increases due to the need to duplicate local
sales offices and trade show expenses, both of which are
currently
shared
G&A savings resulting from elimination of public company costs and
legal fees for corporate activities (assumes
segments are sold, thereby
leveraging acquirers G&A infrastructure)
ZORAN MANAGEMENT ASSUMPTIONS
REGARDING DIS-SYNERGIES
Note: Assumptions underlying dis-synergies
analysis on page 11
Source: Zoran Management
|
Zoran
Proprietary and Confidential
Copyright
2011 Zoran Corporation All Rights Reserved
Source: iSuppli, CSR 2011
DIGITAL
CAMERA
STRATEGIC
OPPORTUNITY
0
100
200
300
400
500
600
2010
2015
SAM ($M)
Camera Chip
Connectivity
GPS
0
20
40
60
80
100
120
140
160
180
2010
2015
DSC/DVC TAM (M)
DSC
DVC
Opportunity for combined
group
Products
Geo-tagging
SiRFstarIV
GSD4e,
SiRFstarIV
GSD4t
Wi-Fi Direct
CSR6030
Lower end Camera
COACH
13
Higher end Camera
COACH
14
Existing relationships
Positive
feedback to
proposed
strategy
CSR
Zoran
Canon
n/a
Nikon
Sony
Kodak
n/a
Olympus
n/a
Samsung
Fujifilm
n/a
Panasonic
n/a
|
Zoran
Proprietary and Confidential
Copyright
2011 Zoran Corporation All Rights Reserved
Source: iSuppli, CSR 2011
DIGITAL
TV
STRATEGIC
OPPORTUNITY
0
50
100
150
200
250
300
2010
2015
DTV TAM (M)
0
500
1000
1500
2000
2500
2010
2015
SAM ($M)
TV Chip
FRC
Connectivity
Opportunity for combined
group
Products
BT-LE remote control/glasses
CSR 1000
Wi-Fi connected TV
CSR 6030
Low latency speakers
BC5
MM
Differentiated
FRC
SFRC
501
TV chip
SupraHD
795
Existing relationships
Positive
feedback to
proposed
strategy
CSR
Zoran
Samsung
Sony
LG
n/a
Panasonic
n/a
Sharp
n/a
|
Zoran
Proprietary and Confidential
Copyright
2011 Zoran Corporation All Rights Reserved
Source: iSuppli, CSR 2011
AUTOMOTIVE
STRATEGIC
OPPORTUNITY
0
50
100
150
200
250
2010
2015
Auto TAM (M)
Head Units
PNDs
0
500
1000
1500
2000
2500
2010
2015
SAM ($M)
Infotainment Silicon
Connectivity
GPS
Opportunity for combined
group
Products
Automotive
infotainment
CSRprima
PND chip
CSRatlasV
DVD play back
Zoran
Image capture and AR
COACH 14
Existing relationships
Positive
feedback to
proposed
strategy
CSR
Zoran
Continental
Pioneer
LG
Harman Becker
Sony
|
1 Year Zoran Corp. (MM) Chart |
1 Month Zoran Corp. (MM) Chart |
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