425
Filed by Tower Semiconductor Ltd.
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
Filer's Commission File No. 000-24790
Subject Company: Jazz Technologies, Inc.
Commission File No. 001-32832
Tower Semiconductor
Frequently Asked Questions (FAQs)
| Q: |
Who
is Jazz Technologies? |
| A: |
Jazz
Technologies (AMEX:JAZ – News) is the parent company of Jazz Semiconductor, Inc., a
leading independent wafer foundry focused on Analog-Intensive Mixed-Signal (AIMS)
process technologies. The company’s broad product portfolio includes digital CMOS
and specialty technologies, such as RF CMOS, Analog CMOS, Silicon Germanium (SiGe),
BiCMOS, Power CMOS and High Voltage CMOS. These technologies are designed for
customers who seek to produce analog and mixed-signal semiconductor devices that are
smaller and more highly integrated, power-efficient, feature-rich and cost-effective than
those produced using standard process technologies. Jazz customers target the wireless and
high-speed wire line communications, consumer electronics, automotive and
industrial end markets, including defense and aerospace. Jazz’s executive offices
and its U.S. wafer fabrication facilities are located in Newport Beach, CA. Jazz
Semiconductor also has engineering and manufacturing support in China. For more
information, please visit http://www.jazztechnologies.com and http://www.jazzsemi.com. |
| Q |
Why
is Tower interested in acquiring Jazz? |
| A: |
We
expect the acquisition to make Tower the leading specialty pure-play foundry and
the seventh largest pure-play foundry in the world. Jazz process technologies and
customer base are highly complementary to Tower with little overlap, thereby
allowing us to diversify our process technology portfolio. In particular, we
believe our embedded non-volatile memory (NVM) and copper 130 nm technologies will be
attractive to Jazz’s customer base when integrated with Jazz’s BCD and SiGe
process technologies. |
| |
We
expect that together we will better serve customer demand for increased analog
integration and manufacturing capacity. This presents an exciting opportunity for Tower
to address market and technology shifts more competitively in the coming years. We
anticipate that this acquisition will also enhance Tower’s ability to access capital
to fund its strategic initiatives, including potential expansions into new applications,
and to execute a more ambitious product roadmap. |
| Q |
What
will be the business strategy for the combined entity? |
| A: |
We
believe Tower and Jazz have complementary business strategies.
Tower has two distinct
customer engagement strategies: |
| |
The
first is a Process Transfer strategy. We have multiple customers that have transferred
their customer-owned process technologies into Tower’s fabs. This provides a high
volume IDM order rate for business stability. |
| |
The
second is the Specialty Segment strategy which focuses on Tower developed specialty
processes, including high end CMOS Image Sensor studio camera and medical X-ray,
mixed-signal for high fidelity audio systems, RFID unique solutions, very high ESD rating
for high speed interfaces (e.g. analog switches, USB switches), advanced power management
for lighting, DC to DC converters, gas gauges, high precision analog targeted at
aerospace/defense and other high reliability markets (e.g. medical, automotive,
industrial). We will strengthen this strategy by expanding our process technology
offering with Jazz’s AIMS (Analog Intensive Mixed Signal) technology, SiGe
leadership for wireless and wire line applications, unique ability to enable complete
radio-on-a-chip, best in class Power Management & BCD technology as well as their
superior design enablement capabilities. |
| Q |
How
will the combined entity be managed? |
| A: |
Jazz
is expected to operate as a standalone separate subsidiary of Tower. Final details of
organization integration are expected to be developed over the next several months. |
| Q: |
How
will the acquisition affect our customers? |
| A: |
We
intend to maintain the existing sales and support structure for customer interface. Our
customers will receive the same level of service, quality and support they have
received from us in the past. We expect our customers to benefit from the
increased manufacturing capacity and broader technology portfolio. |
| Q: |
What
will be the total number of employees for the combined entity? |
| A: |
Tower
has about 1400 employees and Jazz has about 700 employees. Final details of organization
integration are expected to be developed over the next several months. |
| Q: |
What
will be the total capacity for the combined entity? |
| A: |
The
combined entity is expected to have a capacity of ~750,000 eight inch equivalent wafers a
year, including Jazz’s ownership interest in a Fab in China that provides capacity
of about 70,000 wafers a year. We believe that our combined internal capacity can be
further expanded to 950,000 wafers annually. |
| Q: |
What
are the financial details of the acquisition? |
| A: |
The
deal is a stock-for-stock transaction. Under the terms of the agreement, Jazz
stockholders will receive 1.8 ordinary shares of Tower for every share of Jazz
common stock. |
| Q: |
Who
will own the combined entity after the acquisition? |
| A: |
The
combined company will be owned by the stockholders of both companies. Upon closing of the
transaction, Jazz stockholders will own approximately 10% percent of the combined company
on a pro forma basis. |
| Q: |
Who
will manage the combined entity? |
| A: |
Russell
Ellwanger, Tower’s CEO, will spend time at both the company headquarters in Israel
as well as our subsidiary headquarters in Newport Beach. The executive team of the
combined company has not yet been determined. |
| Q: |
What
is the financial profile for the combined entity? |
| A: |
On
a pro forma basis, assuming the merger had occurred on January 1, 2007, the combined
entity would have had $440 million in annual revenues in 2007, and $79 million in EBITDA. |
| Q. |
How
does this transaction affect the cost structure? |
| A. |
Excluding
implementation costs, Tower and Jazz believe this acquisition could
generate as much as $40 million in annual revenue and cost synergies. |
| Q: |
Will
Jazz continue to be public? |
| A: |
Jazz
shares will continue to trade on AMEX until the closing of the transaction at which point
they will be exchanged for Tower shares. Tower’s shares are publicly traded on the
NASDAQ Global Market and the Tel Aviv Stock Exchange under the symbol “TSEM”. |
| Q: |
When
will the acquisition be completed? |
| A: |
The
transaction is expected to close in the second half of 2008. Until that time, both
companies will continue to operate independently. |
Forward Looking
Statements
These FAQs contain forward-looking
statements within the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, including statements concerning Tower’s
proposed merger with Jazz. These statements are based on management’s current
expectations and beliefs and are subject to a number of risks, uncertainties and
assumptions that could cause actual results to differ materially from those described in
the forward-looking statements. All statements other than statements of historical fact
are statements that could be deemed forward-looking statements. For example, statements of
expected synergies, customer benefits, costs savings, financial guidance, the timing of
closing, industry ranking, execution of integration plans and management and
organizational structure are all forward-looking statements. The potential risks and
uncertainties include, among others, the possibility that the merger does not close or
that the closing may be delayed, that expected customer benefits, synergies and costs
savings will not be achieved or that the companies are unable to successfully execute
their integration strategies, that the companies may be required to modify the terms of
the transaction to achieve regulatory approval or for other reasons, that prior to or
after the closing of the merger, the businesses of the companies may suffer due to
uncertainty, as well as other risks described in the reports filed by Tower and Jazz with
the Securities and Exchange Commission (the “SEC”) and, in the case of Tower,
the Israel Securities Authority. These filings identify and address other important
factors that could cause Tower’s and Jazz’s respective financial and operational
results to differ materially from those contained in the forward-looking statements set
forth in this document. Accordingly, no assurances can be given that any of the events
anticipated by the forward-looking statements will transpire or occur, or if any of them
do so, what impact they will have on the results of operations or financial condition of
Tower or Jazz. Tower and Jazz are providing this information as of the date of this press
release and neither Tower nor Jazz undertakes any obligation to update any forward-looking
statements contained in this document as a result of new information, future events or
otherwise.
Additional Information
about the Merger and Where to Find It
In connection with the proposed
merger, Tower intends to file a registration statement on Form F-4 and related materials
with the SEC and Jazz expects to mail a Proxy Statement/Prospectus to the stockholders of
Jazz containing information about Tower, Jazz and the proposed merger. INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND THE OTHER RELEVANT
MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
TOWER, JAZZ AND THE PROPOSED MERGER. The materials to be filed by Tower and Jazz with the
SEC may be obtained free of charge at the SEC’s web site at http://www.sec.gov. In
addition, investors and security holders may obtain free copies of the documents filed
with the SEC by Tower by directing a written request to: Tower Semiconductor Ltd, P.O. BOX
619, Migdal Haemek, Israel 23105, Attn: Investor Relations. Investors and security holders
may obtain free copies of the documents filed with the SEC by Jazz by directing a written
request to: Jazz Technologies, Inc., 4321 Jamboree Road, Newport Beach, California 92660,
Attn: Investor Relations.
Tower, Jazz and their respective
directors, executive officers and other employees, under SEC rules, may be deemed to be
participants in the solicitation of proxies of Jazz stockholders in connection with the
proposed merger. Investors and security holders may obtain more detailed information
regarding the names, affiliations and special interests of certain of these executive
officers and directors in the proposed merger by reading the proxy statement/prospectus
and other relevant materials filed with the SEC when they become available. Information
about the executive officers and directors of Jazz and their ownership of Jazz common
stock is set forth in the proxy statement for Jazz’s 2008 Annual Meeting of
Stockholders, which was filed with the SEC on April 7, 2008. Information about the
executive officers and directors of Tower is set forth in Tower’s annual report on
Form 20-F for its fiscal year ended December 31, 2006, which was filed with the SEC on
June 25, 2007. These documents are available free of charge at the SEC’s website at
www.sec.gov or from the appropriate Investor Relations contacts at Jazz and Tower as
described above.
Information about the executive
officers and directors of Jazz and their ownership of Jazz common stock is set forth in
the proxy statement for Jazz’s 2008 Annual Meeting of Stockholders, which was filed
with the SEC on April 7, 2008. Investors and security holders may obtain more detailed
information regarding the direct and indirect interests of Tower, Jazz and their
respective executive officers and directors in the merger by reading the proxy
statement/prospectus regarding the merger when it becomes available.
