- In an open letter, Cypress Semi (NASDAQ:CY) has offered $19.75/share in cash ($711M, or $575M net of cash on hand) to acquire fellow chipmaker Integrated Silicon (ISSI). ISSI is 2 months removed from agreeing to a $19.25/share acquisition by a Chinese consortium.
- Cypress, of course, is only 2 months removed from closing its $5B all-stock merger with Spansion. With post-merger integration apparently proceeding well - Cypress recently upped its target for post-merger cost synergies by $25M/year to $160M/year - the company might feel it can also reap major cost synergies from an ISSI deal.
- ISSI's product line includes DRAM, SRAM, and NOR flash, as well as audio amplifiers, LED drivers, and a variety of other analog/mixed-signal chips - the post-merger Cypress already has plenty of memory and mixed-signal exposure. Cypress' offer price is equal to less than 2x trailing sales after backing out net cash.
- ISSI, which closed at $18.74 today, is halted. Cypress is down 1% AH to $12.53. Given the modest premium to the Chinese consortium's acquisition price, Cypress' offer might just be an opening bid.