Watkins-Johnson’s legacy sold for $1 a share

WJ Communications — all that’s left of the Palo Alto company founded in 1957 by Dean Watkins and H. Richard Johnson — has agreed to be acquired by TriQuint Semiconductor for $1 a share in cash, or about $72 million.

The price was 18 percent above WJ’s closing price prior to the deal’s announcement, the
company said in a release included with its SEC filing Tuesday, and 50 percent higher than the stock’s average closing price for the prior thirty days.

WJ, which hasn’t shown a profit since 2000, said it hired Thomas Weisel Partners in October to help evaluate “strategic alternatives” after warning its third quarter results would be below expectations because several deliveries of its radio frequency products were rejected by a vendor and other “operational challenges”.

The original Watkins-Johnson was primarily a defense contracting firm providing the government with systems and devices for the electronic warfare market. As late as 1988, 90 percent of the its sales came from defense electronics. By 1995, in the wake of the end of the Cold War, that share was down to 40 percent, as the company branched out into making chip manufacturing equipment and products for wireless telecommunications.

The company was taken private in a $321 million buyout by Fox Paine in October 1999, but re-emerged as a “new” public company less than a year later in August 2000, when it offered shares to the public at $16 each. They more than doubled that first day, giving Fox Paine’s stake in the company a value of about $1.4 billion.

 
 

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