Tue, Apr. 12, 12:26 PM
- A Chinese investor group has disclosed a stake in IDT (IDTI +14.8%), and says it has offered to acquire the chipmaker for $32/share in cash. (13D filing)
- IDT has surged above $22 (still well below the offer price) on the news. Many U.S. chipmakers have received Chinese M&A interest over the last several quarters. However, regulators have been giving proposed deals considerable scrutiny. Fairchild Semi recently turned down a Chinese takeover bid (and thus stuck to an existing deal to sell to ON Semi) due to concerns about regulatory approval.
- Update (1:07PM ET): Skepticism abounds. IDT is now only up 2.5%.
Oct. 26, 2015, 5:26 PM
- Along with its FQ2 results, IDT (NASDAQ:IDTI) has announced it's buying ZMDI, a German provider of power management, battery management, sensor, and LED driver ICs for auto and industrial clients, for $310M in cash.
- With ZMDI producing quarterly revenue of $20M, IDT is paying roughly 4x sales. The company's gross margin (currently 57%) is expected to top 60% once cost synergies are reaped.
- IDT: "IDT gains immediate leverage for new designs in Wireless Charging, Power Management, and Timing & Signal Conditioning ... ZMDI's signal conditioning products provide an elegant interface between microcontrollers and analog components, such as sensors. This is extremely complimentary to IDT's Advanced Timing products, and will enable intelligent systems that are aware of their surroundings, and can adjust system performance, timing, and power management automatically."
- Separately, IDT's buyback authorization has been upped by $300M to $531M. That's good for repurchasing 15% of shares at current levels. IDT plans to pay for the additional $300M via debt, and promises to "execute this portion of our buyback on an accelerated pace."
- IDT's FQ2 top-line performance is attributed to "a strong rebound in sales of our communications products, continued market leadership in memory interface, as well as solid contributions from our wireless charging business." EPS benefited from a 70 bps Q/Q and 220 bps Y/Y increase in gross margin (non-GAAP) to 63.4%.
- Shares have jumped to $26.27 after hours, making new 52-week highs along the way.
- FQ2 results, PR
May 27, 2015, 3:00 PM
- Chip stocks are posting outsized gains (SOXX +4%) amid a 1.3% increase for the Nasdaq after the WSJ reported Avago and Broadcom are in advanced merger talks, sparking hopes for further M&A.
- A Broadcom/Avago deal would be worth ~$67B at current valuations, easily making it the largest in the chip industry's breathless consolidation wave. It would also touch markets ranging from smartphones to set-tops to servers to switches/routers.
- Notable gainers include Avago RF chip peers Skyworks (SWKS +4.3%), Qorvo (QRVO +3.2%), and Anadigics (ANAD +4.9%). Others include Micron (MU +3.8%), SanDisk (SNDK +4.3%), NXP (NXPI +3.5%), Silicon Motion (SIMO +8.3%), Cirrus Logic (CRUS +4.8%), STMicroelectronics, (STM +3.4%), Synaptics (SYNA +3.4%), Atmel (ATML +2.8%), Cavium (CAVM +4.5%), Intersil (ISIL +4.6%), Semtech (SMTC +3.9%), ON Semi (ON +3.8%), Microsemi (MSCC +4.4%), and IDT (IDTI +4.2%).
- Non-chipmakers tied to the industry are also doing well. Standouts include ARM (ARMH +4.4%), Amkor (AMKR +4.6%), ASML (ASML +3.1%), and Rambus (RMBS +3.3%).
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Jun. 17, 2014, 6:58 PM
- The consolidation wave that has hit the semi industry could soon yield tax inversion deals for foreign firms similar to deals seen in the healthcare industry, says FBR's Christopher Rolland.
- Inversion deals allow U.S. companies buying foreign firms to see lower tax rates if less than 80% of the equity in the new company is owned by legacy U.S. shareholders, and the post-merger company has substantial foreign ops.
- Rolland thinks ARM (ARMH), NXP (NXPI), Mellanox (MLNX), and Taiwan's MediaTek could be among the foreign companies targeted by U.S. chipmakers. Worth noting: Mellanox sells more than just chips, and ARM's business model depends on the company maintaining a neutral status within the industry.
- Meanwhile, Nomura's Romit Shah names 15 potential M&A candidates, and divides them into 3 groups: "Sub-scale companies" with high margins and strong IP; "strategic companies" with compelling product lines; and "undervalued companies."
- Shah's "sub-scale companies:" IDTI, ISIL, MTSI, MCRL, SMTC, SLAB.
- "Strategic companies:" ALTR, AMCC, ATML, CAVM, MPWR, BRCM ($22.5B market cap could make it tough to digest).
- "Undervalued companies:" DIOD, IRF, MSCC.
Jun. 9, 2014, 10:36 AM
- A slew of chip stocks are rallying following Analog Devices' (ADI +5.9%) $2B deal to acquire RFIC vendor Hittite Microwave.
- The purchase is part of an M&A wave that has hit the semiconductor industry over the last 12 months, as chipmakers try to gain scale, cut opex, and grow their cross-selling opportunities by consolidating. Other deals: RF Micro/TriQuint, Avago/LSI, Microchip/ISSC.
- ADI, which shares many telecom equipment, defense/aerospace, and automotive clients with Hittite, predicts Hittite's RF, microwave, and millimeter wave ICs will complement its RF and signal-conversion (ADC/DAC) products.
- Several RF and analog/mixed signal chipmakers are higher, but they're not the only gainers: RFMD +1.8%. TQNT +1.8%. PSMI +2.5%. LLTC +1.6%. MSCC +2.1%. IDTI +3.8%. ATML +3.4%. IRF +1.4%. SIGM +3.9%. AMCC +3.8%.
- Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
May 29, 2013, 4:43 PM
PMC-Sierra (PMCS) is buying IDT's (IDTI) PCI Express flash controller chip business for $100M in cash. The deal gives PMC, whose traditional RAID storage controller and adapter card sales have been pressured, the chance to be an arms dealer for a booming and hotly contested server flash module market. PMC notes the IDT unit has scored several major design wins, and has released the first controller chip supporting the new NVMe standard. IDT says it will now focus its R&D spend on "advanced timing, wireless power, memory interface, and communications signal chain" chips.| May 29, 2013, 4:43 PM
Dec. 19, 2012, 7:54 PM
Integrated Device Technology (IDTI) and PLX Technology (PLXT) mutually agree to terminate their merger, in response to a determination by the FTC to file an administrative complaint challenging IDT's proposed acquisition of PLXT and the absence of a clear path for the parties to complete the deal. Concurrently, IDT is also withdrawing its related exchange offer to acquire all of the outstanding shares of common stock, and intends to return all previously tendered shares.| Dec. 19, 2012, 7:54 PM
Dec. 19, 2012, 10:00 AM
PLX Technology (PLXT -15.4%) tumbled and IDT (IDTI +4%) spikes higher on news the FTC has filed a complaint challenging the companies' planned merger. The agency is concerned about the 85%+ share the combined company would have in the PCI-Express switch market. Back in April, IDT agreed to buy PLX for $3.50 in cash and 0.525 shares for every PLX share outstanding.| Dec. 19, 2012, 10:00 AM
May 1, 2012, 9:44 AM
Diversified chipmaker Integrated Device Technology (IDTI -11.1%) plunges after it pays a huge premium to acquire PLX Technology (PLXT +63.6%), a maker of Ethernet, USB, and PCI interface chips. IDT predicts the deal will be accretive to earnings by the January '13 quarter, and will produce $35M+ in annual cost synergies. Canaccord (Buy) is still bullish on IDT, but worries the deal adds complexity to its turnaround story.| May 1, 2012, 9:44 AM
Apr. 30, 2012, 7:05 PM
Integrated Device Technology (IDTI) acquires PLX Technology (PLXT) for around $330M as the manufacturer of semiconductor products looks to enhance its product portfolio. PLXT shareholders will receive $3.50 in cash and 0.525 shares of IDTI for each share outstanding. That values PLXT at around $7 a share, a 76% premium to today's close. PLXT +65.7%, IDTI -6.9% AH. (PR)| Apr. 30, 2012, 7:05 PM