Skyworks to Buy PMC-Sierra
October 06 2015 - 8:20AM
Dow Jones News
Skyworks Solutions Inc., a chip supplier for Apple Inc., has
agreed to buy PMC-Sierra Inc. in a $2 billion all-cash deal, as the
semiconductor company seeks to strengthen its market position.
Skyworks said it would pay $10.50 a share for semiconductor and
software-solution developer PMC, a 37% premium to PMC's closing
price of $7.69 on Monday.
Skyworks will fund the acquisition with cash on hand from the
combined companies and other debt financing. Shares of Skyworks
were up 3.1% premarket Tuesday, while PMC shares surged 32%.
The boards of both Skyworks and PMC have approved the deal,
which is expected to close in the first half of 2016, subject to
approvals from regulators and PMC shareholders.
"With our acquisition of PMC, Skyworks will be uniquely
positioned to capitalize on the explosive demand for high
performance solutions that seamlessly connect, transport and store
Big Data," said Skyworks Chairman David J. Aldrich. Skyworks said
it expects annual revenue of more than $4 billion with operating
margins exceeding 40% following the completion of the deal.
Separately, Skyworks said it expects revenue of around $880
million and adjusted earnings of $1.52 a share for the fourth
quarter of fiscal 2015, driven by the growing adoption of its
integrated mobile systems. Analysts surveyed by Thomson Reuters
expected Skyworks to post a profit of $1.51 a share on revenue of
$876 million for the quarter.
The Woburn, Mass.-based company posted sales of $2.3 billion in
its 2014 fiscal year.
Skyworks, which generates a big chunk of its revenue from China,
has been battered lately as concerns over growth in China have
intensified. In a recent research note from Goldman Sachs, Skyworks
topped a list of 20 U.S. stocks with the heaviest exposure to that
country.
Ezequiel Minaya contributed to this article.
Write to Joanne Chiu at joanne.chiu@wsj.com
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(END) Dow Jones Newswires
October 06, 2015 08:05 ET (12:05 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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