TriQuint Acquires Ailing WJ Communications

With TriQuint Semiconductor Inc.'s (TQNT) agreement today to acquire wireless chipmaker WJ Communications Inc (WJCI). For $72 million, private equity firm Fox Paine & Co. LLC will get an exit after a long, rough ride.

Private equity firm Fox Paine & Co. LLC acquired a majority stake in the chipmaker in January 2000 for $300 million, $50 million of which was cash. After unloading some of WJ's slower-growing businesses, the firm took WJ public in August 2000 and used the proceeds to wipe out the rest of its debt. Thirteen days after the IPO, WJ's stock priced had rocketed to $58.94 a share, and Fox Paine boasted a $2.13 billion unrealized gain on its $50 million investment.

Two years later, after WJ's fortunes waned with the telecom meltdown, Fox Paine tried to acquire the 34% of its shares it didn't own. But in March 2003, it canceled those plans, saying that it would rather invest in add-on acquisitions for the chipmaker than boost its 70% stake. It starting doing just that the follwing year. In 2004,WJ acquired the wireless infrastructure assets of privately held rival EiC Corp. for up to $26.5 million in cash and stock, and the following year it acquired RFID equipment maker Telenexus Inc. for about $10 million in cash. According to a 2007 proxy statement, Fox Paine now owns about 73% of WJ.

The TriQuint deal carries a $2.4 million termination fee. WJ got financial advice from Thomas Weisel Partners manaiging directors Steve Levy and Mark Quinlan, and legal counsel from Shumaker, Loop & Kendrick, LLP.

Shares of WJ climbed 14%, to 97 cents, in early afternoon trading. - Olaf de Senerpont Domis

See March 10 press release from TriQuint
See March 2003 story from TheDeal.com
See September 2002 story from TheDeal.com