Semiconductor company Skyworks Solutions has announced a definitive agreement to acquire semiconductor and software company PMC-Sierrra for USD 10.50 per share in an all-cash transaction valued at approximately USD 2 billion. The price represents a 37 premium on PMC’s closing share price on 5 October. The operation will be funded with cash on hand and new debt financing. This acquisition solidifies Skyworks’ position as a highly diversified analogue, RF and mixed signal semiconductor provider by significantly expanding its product portfolio, customer base and end market applications. The acquisition is expected to close in the first half of 2016, pending PMC shareholder approval, regulatory authorisation and customary closing conditions.
Upon completion of the acquisition, Skyworks expects annual revenues of more than USD 4 billion with gross margin in the 55 percent range and operating margin exceeding 40 percent. Skyworks’ chairman and CEO, David Aldrich, said his company will leverage PMC’s innovative storage systems, flash controllers, optical switches and network infrastructure to meet the explosive demand for solutions that connect, transport and store Big Data. He added that the acquisition would create further economic value for Skyworks shareholders upon closing, with immediate margin expansion and accretion.
Skyworks has also indicated that based on preliminary results, it expects to record approximately USD 880 million of revenue and USD 1.52 of non-GAAP diluted earnings per share in the fourth quarter. The company’s sustained performance is being driven by the growting adoption of its integrated mobile systems and new opportunities across the IoT, according to CFRO Donald Palette.
