Companies target communication and PC component markets Semiconductor maker Integrated Device Technology (IDT) has reached an agreement to take over rival Integrated Circuit Systems (ICS) in a cash-and-stock deal valued at around $1.7 billion.“This is merger of two successful companies,” IDT Chief Executive Officer Greg Lang said during a conference call with analysts. “We believe this is a complementary fit bringing scope and scale to both companies.”Santa Clara, California-based IDT generated net income of $13 million last year on $391 million in sales of its semiconductor devices for networking equipment. ICS, headquartered in Norristown, Pennsylvania, had net income of $78.5 million on sales of $272.1 million in its last fiscal year. Lang, who will remain CEO of the combined company, said the two vendors have some competitive overlap in the communication and PC component market, but also have diverse product portfolios in other areas, like the digital TV and military device markets. He expects the acquisition to extend IDT’s product line while saving the enlarged company up to $50 million a year, within the next four years, by reducing redundant spending.ICS CEO Hock Tan will become chairman of the combined company’s nine-member board, to which IDT will designate five directors and ICS will appoint four.The deal calls for ICS shareholders to receive 1.3 shares of IDT stock and $7.25 in cash per ICS share, a combined value of around $23.54, based on Wednesday’s closing price of IDT shares (ticker symbol: IDTI) on the Nasdaq exchange. In Thursday trading, IDT shares dropped 8 percent to close at $11.51, while ICS (ICST) shares rose 10 percent, to $21.77. Pending shareholder and regulatory approvals, the companies expect the deal to close toward the end of 2005. Technology Industry