SST (Sunnyvale, Calif.) will go private in the process. It has entered into a definitive merger agreement to be acquired by Technology Resource Holdings Inc., a Prophet Equity LP-controlled entity, as well as by members of SST's management team.

Prophet Equity will acquire all of the outstanding common stock of the company for $2.10 per share, except for shares held by Bing Yeh, SST's chairman and CEO, and Yaw Wen Hu, SST's executive vice president and COO and member of the board.

Yeh and Hu have agreed to exchange all of their shares of SST common stock for shares of capital stock of the resulting privately-held company.

SST's board, acting upon the recommendation of a ''strategic committee'' composed of all of SST's independent directors, approved the agreement and resolved to recommend that the company's shareholders adopt and approve the agreement.

The agreement contains a go-shop provision under which the ''strategic committee,'' with the assistance of its independent advisors, has the right to solicit proposals or offers with respect to, or that would reasonably be expected to lead to, an acquisition proposal from a third party for a 45 day period beginning on Nov. 13.

SST does not intend to disclose any developments with respect to this solicitation process unless or until the ''strategic committee'' has made a decision with respect to any proposals or offers it may receive.

"After an extensive review of strategic alternatives with company management and our financial advisors, we determined this all-cash sale of the company with a go-shop provision is in the best interests of the company's shareholders," said Ronald Chwang, chairman of the ''strategic committee,'' in a statement.

The transaction is expected to close in the second quarter of 2010. Leveraging its so-called SuperFlash technology, SST is a provider of nonvolatile memory solutions with product families that include various densities of high functionality flash memory components and flash mass storage products.

SST recently said revenues for the third quarter were $71.3 million, compared with $58.1 million in the second quarter of 2009 and with $92.4 million in the third quarter of 2008.

Net income for the third quarter of 2009 was $3.1 million, or $0.03 per share, based on approximately 95.9 million diluted shares. By comparison, the company recorded a net loss of $6.4 million, or $0.07 per share, based on approximately 95.7 million diluted shares in the second quarter of 2009. For the third quarter of 2008, SST reported net income of $4.9 million, or $0.05 per share based on approximately 99.7 million diluted shares.

SST expects its fourth quarter revenues to be between $67 million and $72 million. Net income per share is expected to be between $0.00 and $0.03.