Goleta 5G filter company Resonant sold to Japanese firm at big premium
Resonant, a developer of radio frequency filters with a focus on 5G cellular devices, is being acquired by Murata Electronics North America, a subsidiary of the Japanese company Murata Manufacturing, for $295 million in cash.
Resonant moved its headquarters from Goleta to Austin, Texas, a little over a year ago, but still has its main research and development facility in Goleta. The company’s Feb. 14 statement announcing the acquisition did not address the future of the Goleta operation, and Resonant CEO George Holmes declined to answer questions about the acquisition.
The deal values Resonant at $4.50 per share, a 266% premium over its closing price of $1.23 on Feb. 14, just before the deal was announced. Shares closed at $4.39 on Feb. 15.
Resonant did trade at or above the $4.50 acquisition price for most of the first quarter of 2021, but the past year saw its shares drop 83% before the deal was announced.
The transaction, which has been approved by both companies’ board of directors, is expected to close by the end of March. Resonant will become a wholly owned subsidiary of Murata.
The acquisition will allow Murata to expand its offerings and access additional markets and customers, the company said. Murata is based in Kyoto, Japan, and has had a working relationship with Resonant since 2019.
“We have collaborated closely with Resonant for many years,” Murata President Norio Nakajima said in a company news release. “We are confident Resonant’s innovation is a key strategic differentiator for the mobile industry. This transaction will deepen our existing partnership and position us to better meet our customers’ needs and expand opportunities for Murata.”
Under the agreement, Murata will purchase all outstanding shares of Resonant not already owned by the company for $4.50 per share. That amounts to just over $295 million.
Centerview Partners served as lead financial advisor to Resonant on the deal while Stifel also served as financial advisor to Resonant. Stubbs Alderton & Markiles and Proskauer Rose served as legal advisors to Resonant.
Mizuho Securities Co. served as exclusive financial advisor to Murata. Gibson, Dunn & Crutcher; Covington & Burling; and Akin, Gump, Strauss, Hauer & Feld served as legal advisors to Murata.
“Murata is a global leader in RF modules and filters, and we are excited to build upon the successful partnership we’ve had together,” Holmes said in a news release.
According to an SEC filing from December, Holmes owns about 500,000 of the company’s 65.7 million total shares. His share of the company will be worth around $2.3 million in the acquisition, much more than the $615,000 it was worth day before the deal was announced.
Michael Fox, a member of Resonant’s board and the CEO of Park City Capital, is Resonant’s largest individual shareholder, with about 3.5% of the company, a stake worth around $9 million under the terms of the acquisition.
Resonant’s biggest shareholder is AWM Investment Co., which holds 6.9% of the company, worth about $18.8 million in the Murata deal.
Though Resonant is a growing company, it has not been profitable. Its gross sales have grown from $524,000 in 2018 to $715,000 in 2019 and $3.16 million in 2020. Financial results for fiscal 2021 have not been released yet.
But losses have piled up for Resonant as well, as the company saw a net loss of $24.8 million in 2018, $29.9 million in 2019 and $28.4 million in 2020.
The company ended fiscal year 2020 with more than $25 million in total assets.