Is The Latest Stumble An Opportunity At Altera?
Stephen Simpson, CFA
Stephen Simpson, CFA
Dec. 28, 2015, 10:08 AM
- Intel's (INTC -0.5%) $16.7B purchase of FPGA developer Altera (ALTR) is officially on the books. As previously announced, Intel expects the deal to be accretive to non-GAAP EPS and cash flow in its first year after closing, and dilutive to GAAP EPS due to M&A-related costs.
- Altera will now operate as Intel's Programmable Solutions Group (PSG). Notably, PSG won't be led by Altera CEO John Daane (has a large golden parachute), but by Dan McNamara, previously the GM of Altera's embedded products division. McNamara's name doesn't currently appear on Altera's executive bio page.
- Intel promises Altera/PSG will work with Intel's Data Center Group (server CPUs/network processors) and IoT Group (embedded CPUs and related products) to deliver "highly customized, integrated products and solutions." The company promised last month solutions pairing Xeon CPUs with Altera FPGAs will arrive in Q1, while estimating FPGAs will go into 30% of data center servers by 2020.
- Last week: Chinese regulators approve Intel/Altera deal
- Update: Deutsche's Ross Seymore estimates Altera will account for ~3% of Intel's 2016 revenue, and ~9% of DCG revenue. His Intel target has been upped by $1 to $37. "We now estimate Intel’s DCG revs to grow +21% y/y, up from +10% y/y previously as ALTR accounts for ~53% of y/y DCG rev growth. We model 2016 gross margins to benefit slightly (62.4% from prior DBe 62.2%) with opex increasing +2.7% from prior DBe to $20.9b ($20.4b previously). Our resulting 2016 EPS goes to $2.40 from $2.35 previously."
Dec. 21, 2015, 11:52 AM
- China's Ministry of Commerce (MOFCOM) has signed off on Intel's (INTC - unchanged) purchase of Altera (ALTR +2%), thus providing the final regulatory clearance needed for the $16.7B ($54/share) all-cash deal to go through. (8-K filing)
- The acquisition is now expected to close "on or about" Dec. 28. Altera has risen to within $0.09 of Intel's buyout price.
- Two months ago: EU regulators approve Intel/Altera deal
Oct. 22, 2015, 4:22 PM
- Altera (NASDAQ:ALTR): Q3 EPS of $0.20 misses by $0.10.
- Revenue of $399.57M (-20.0% Y/Y) misses by $29.38M.
Oct. 21, 2015, 5:35 PM
- ACTG, ALGN, ALTR, AMZN, ATHN, BAS, BCR, BJRI, BYD, CHE, COF, CYN, CYT, DV, EGHT, ETFC, FET, FII, FSL, FTNT, GHL, GIMO, GOOG, HBHC, HURN, IG, JNPR, LHO, LOGM, LSTR, MKTO, MSFT, MXIM, N, NTGR, P, PACB, PEB, PFG, QLGC, QLIK, QSII, RMD, SHOR, SIVB, SKX, SMCI, SPNC, SRCL, SWN, SYK, SYNA, T, TRN, UCTT, VRSN, WRE
Oct. 9, 2015, 2:49 PM
- Reuters reports EU regulators have approved Intel's (NASDAQ:INTC) planned $54/share ($16.7B) acquisition of Altera (ALTR +1.3%), following September clearance from the DOJ. Regulatory approval has been widely expected - Intel doesn't compete with Altera's core FPGA products, and Xilinx remains a formidable rival FPGA supplier.
- Altera still trades $1.60 below Intel's buyout price. SA author Chris DeMuth Jr. has been arguing a good merger arb opportunity exists. He estimated yesterday Altera's net arbitrage spread (diminished a bit today) spelled a 15% annual return.
- 3 days ago: Altera shareholders approve Intel deal
Oct. 6, 2015, 6:37 PM| Oct. 6, 2015, 6:37 PM | 3 Comments
Aug. 25, 2015, 5:35 PM
- investors should stick with "market darlings" - the 25 stocks that had performed the best during the six months before a market pullback - according to the analyst team at RBC.
- The firm notes that although many recent winners are leading the market lower, the extent of the underperformance is just 1%; it also says investing in the group following sharp market pullbacks is a winning strategy over the ensuing week, month and six months.
- RBC's 25 market darlings are AET, ALTR, AMZN, AIZ, CVC, CI, CAG, EA, EQIX, EXPE, GME, GOOGL, HAS, HCA, MNST, NFLX, NKE, PRGO, REGN, SBUX, TSO, TWC, TSS, UA, UHS
Jul. 23, 2015, 4:45 PM
- Altera (NASDAQ:ALTR) declares $0.18/share quarterly dividend, in line with previous.
- Forward yield 1.46%
- Payable Sept. 1; for shareholders of record Aug. 10; ex-div Aug. 6.
Jul. 23, 2015, 4:19 PM
- Altera (NASDAQ:ALTR): Q2 EPS of $0.23 misses by $0.03.
- Revenue of $414.16M (-15.7% Y/Y) beats by $4.6M.
- Shares -0.16%.
Jul. 22, 2015, 5:35 PM
- ABAX, ACTG, ALGN, ALTR, AMZN, ATHN, BCR, BJRI, BLDR, BYD, CA, CB, CBI, CHE, CLGX, CLS, COF, CPHD, CTCT, CYN, DGII, ETFC, FET, FII, FLEX, FSL, GHL, GIMO, HBHC, HWAY, IG, JNPR, LOGM, LSTR, MITK, MKTO, MSCC, MXIM, N, NANO, NTGR, P, PEB, PFG, PFPT, PMCS, QLIK, RGA, RHI, RSG, RT, SBUX, SIVB, SPNC, SRCL, STAG, SWKS, SYK, T, TRIP, TRN, UIS, V, VRSN, WIRE, WRE
Jun. 1, 2015, 9:21 AM
Jun. 1, 2015, 8:49 AM
- As rumored over the weekend, Intel (NASDAQ:INTC) agrees to buy Altera (NASDAQ:ALTR) for $54 per share in cash, or $16.7B. The purchase is expected to be accretive to Intel's EPS and free cash flow in the first year after the close (in six-to-nine months).
- A webcast to discuss the deal is set for 10 ET.
- INTC +0.65% and ALTR +4.8% (to $51.20) premarket
- Previously: WSJ: Intel to announce $54/share Altera deal on Monday (May 31)
May 31, 2015, 4:02 PM
- Following more than two months of drama, Intel (NASDAQ:INTC) is set to announce tomorrow it's buying FPGA vendor Altera (NASDAQ:ALTR) for the same $54/share price Bloomberg reported hearing in early April, per the WSJ.
- The reported price translates to a $16.2B valuation (per Yahoo/Google Finance), or $13.2B after factoring net cash/investments. It represents an 11% premium to Altera's Friday close, and a 56% premium to where it traded before the WSJ first reported of deal talks on March 27.
- Since the first reports, Altera has posted disappointing Q1 results/Q2 guidance, and Intel has announced a server CPU partnership with programmable ASIC maker eASIC (Pending:EASI) that has been seen as a hedge against Altera. But that alliance could prove complementary, as FPGAs remain the gold standard for rapid programmability and low design costs, while ASICs maintain a size, performance, and power edge.
- Will Xilinx (NASDAQ:XLNX) get acquired next? Reuters reported earlier this month Avago has shown interest in the Altera archrival. But that was before Avago struck a $37B deal to merge with Broadcom.
- Previously: Intel/Altera seen providing many synergies, sparking more M&A
May 29, 2015, 9:14 AM
May 29, 2015, 1:53 AM
- Intel (NASDAQ:INTC) is close to a deal to buy fellow chipmaker Altera (NASDAQ:ALTR) for about $15B, the NY Post reports, stating that a deal is "likely by the end of next week."
- Altera reportedly rejected an Intel $54/share bid just a few months ago and then broke off sales talks, but that was before Altera issued disappointing earnings.
- Intel also has the option to launch a hostile bid after June 1, when its standstill agreement with Altera expires.
- Intel-Altera timeline
May 18, 2015, 9:15 AM