PMC-Sierra (PMCS) to be Acquired by Skyworks Solutions for $2 Billion
Shares of PMC-Sierra Inc. (PMCS) were trading up +2.46 or +31.99 percent to $10.15 in Tuesday’s premarket after news broke late yesterday that the company would be taken over by Skyworks Solutions Inc. (SWKS) for $2 billion in cash. PMC-Sierra stock closed at $7.69, up +0.26 or +3.50 percent in Monday’s regular trading session.
Founded in 1984, Sunnyvale, California based PMC-Sierra is the result of the combination of British Columbia’s Pacific Microelectronics Centre — a spinoff of Microtel Pacific Research — and Sierra Semiconductor.
Woburn, Massachusetts based Skyworks Solutions, Inc. was founded in 2002 and resulted from the merger of Alpha Industries and the wireless division of Conexant. The company is a global manufacturer of high performance analog semiconductors used in radio frequency (RF) and mobile communications systems. Its products include attenuators, amplifiers, diodes, detectors, front end modules and display solutions among many others. The company’s semiconductors are used in wireless infrastructure equipment, handsets and other RF products.
The definitive agreement announced yesterday after the market close will have Skyworks acquire PMC-Sierra for $10.50 per share in cash. The all cash transaction is valued at approximately $2 billion and is a +37 percent premium over PMC-Sierra stock’s Monday closing price. The acquisition will leave Skyworks as a market leader, expanding its existing product portfolio, customer base and end market applications.
Greg Lang, President and Chief Executive Officer of PMC-Sierra said in a press release that, “Given Skyworks' deep global sales channels and leadership applications support, underpinned by a world class supply chain, we could not have found a better partner. Together, we plan to develop a wider range of leading-edge solutions for our customers, target new growth vectors and enable some of the most exciting networking and storage platforms in the world, while delivering immediate value for our shareholders.”
David J. Aldrich, Chairman and Chief Executive Officer of Skyworks said that, “Specifically, we plan to leverage PMC's innovative storage systems, flash controllers, optical switches and network infrastructure solutions to expand our engagements with some of the world's leading OEMs and ODMs as well as emerging hyperscale data center customers.”
Skyworks said it will fund the transaction with cash on hand from the combined companies, as well as with new debt financing. The transaction’s close is not subject to financing conditions and has been approved by the boards of both companies.
The deal is expected to close by the first half of 2016 and is still subject to PMC shareholder approval, the customary regulatory and other closing conditions. The deal seems to have shareholder and market approval, with both PMC-Sierra and Skyworks Solutions stock higher before the bell. Skyworks is up more than two percent in the premarket.
Other News About PMCS
Chipmaker PMC-Sierra taps Qatalyst to pursue sale-sources
Company had been shopping for a buyer.
Why PMC-Sierra Is Winning In China; Susquehanna Upgrades To Positive
Company analyst upgraded the stock to a buy and raised his price target from $7 to $11.
Other Stocks in the News
ABMiller said to have rejected informal InBev takeover offer: Bloomberg
ABMIller reportedly said that the initial offer of 40 GBP ($60.67) was too low.
Cisco security researchers disable big distributor of 'ransomware'
Company has reportedly disrupted the spread of malicious software that demands payment for decrypting users’ data.