IDT: Doing the Asset Two-Step

| About: Integrated Device (IDTI)

It's been quite the busy week for interconnect chipmaker Integrated Device Technologies Inc. (NASDAQ:IDTI). The Silicon Valley company on Monday swooped in and bid $100 million for Tundra Semiconductor Inc., outbidding Gennum Corp., which had earlier offered $92 million for the Canadian chipmaker.

Thursday Gennum conceded defeat and accepted a $4.2 million termination payment from Tundra, but that was just the start of Thursday's action for IDT president and CEO Ted Tewksbury.

The company announced a definitive agreement to acquire Tundra (The Deal Pipeline subscribers can read more about the deal here), and then after market close it unveiled the divestiture of its network search engine unit, which it agreed to sell to NetLogic Microsystems Inc. (NASDAQ:NETL) for about $90 million. On top of all that, the company also reported fiscal fourth-quarter earnings.

"I just signed two agreements this morning," Tewksbury said in a conference call.

In outlining IDT's M&A strategy going forward, Tewksbury said the company would focus on the classic two-pronged approach: strategic expansions into new market areas, such as IDT's purchase in October of video-processing chipmaker Silcon Optix for undisclosed terms, and market share-boosting consolidation moves, like the Tundra deal.

"The businesses that are not aligned with our long-term strategy, we have ... harvested, as in the case of the search engine divested," Tewksbury said. "Those businesses that remain, our goal is to be number one or number two in each one of those markets and so we are looking at consolidation acquisition opportunities in order to achieve that."

While most chipmakers are stumbling around in the current semiconductor industry downturn, IDT appears to be making some decisive strategic moves.

"The macro economic downturn has been financially challenging but as you can see, we have embraced this once-in-a-lifetime disruptive opportunity to reinvent the company," Tewksbury said. - Olaf de Senerpont Domis