Stephen Simpson, CFA
Mon, Mar. 14, 2:00 PM
- The FTC and Germany's Federal Cartel Office have approved Microchip's (MCHP -1.2%) planned $3.4B acquisition of fellow microcontroller maker Atmel (ATML - unchanged).
- Korea' Fair Trade Commission is still reviewing the deal - Microchip "anticipates receiving approval" - and French regulators are reviewing "certain French ISS and defense business matters." Atmel shareholders are due to vote on the deal on April 1. Microchip previously said it expects the acquisition to close in calendar Q2.
Tue, Jan. 19, 5:10 PM
- It's official: Microchip (NASDAQ:MCHP) is buying Atmel (NASDAQ:ATML) for $8.15/share in cash and stock, or an enterprise value of $3.4B. Atmel declared Microchip's offer superior to Dialog Semi's (OTC:DLGNF) last week, and Dialog later stated it wouldn't try to one-up Microchip. Dialog will get a $137.3M termination fee.
- The deal is expected to close in calendar Q2. Microchip will finance it via existing cash and credit facility borrowings. $170M/year in cost and revenue synergies are expected in FY19 (ends March '19).
- Microchip is paying $7/share in cash and $1.15/share in stock, with the amount of shares to be issued capped at 13M - if necessary due to a lower stock price, Microchip will up its cash payout. Concurrently, Microchip is upping its available buyback authorization by 3.6M shares to 15M, and plans to "repurchase the approximate number of shares it issues in the Atmel acquisition."
- Separately, Microchip says it expects to report FQ3 (calendar Q4) revenue of $552M and EPS of $0.62-$0.63, slightly above a consensus of $551.8M and $0.61. Gross margin guidance has been revised to 57.9% from 57.7%-57.9%. "Microchip's core business in the December quarter remained strong amidst the turbulence seen in the macro environment," says CEO Steve Sanghi. Official results arrive on Feb. 3.
- Earlier today: Morgan Stanley upgrades Microchip, praises Atmel deal
Thu, Jan. 14, 2:38 PM
- Dialog Semi (OTC:DLGNF) says it won't revise its existing offer to acquire Atmel (ATML - unchanged). That clears the way for Microchip (MCHP +2.8%) to acquire Atmel with its $8.15/share cash/stock bid, which Atmel recently declared to be superior to Dialog's offer.
- Atmel will pay Dialog a $137.3M termination fee if its deal with the U.K. chipmaker is terminated. Its shares currently trade at $7.97. Microchip is rallying on a day the Nasdaq is up 2.1%.
Wed, Jan. 13, 9:19 AM
- Atmel has notified Dialog Semi (OTC:DLGNF), with whom it agreed to a cash/stock deal in September, it intends to terminate its merger agreement with the company. However, Atmel's board "will consider in good faith any changes to the Dialog merger agreement or other arrangements that Dialog may offer in writing and would be legally binding upon Dialog by 5:00 PM California time on Tuesday, January 19, 2016." Atmel will pay a $137.3M termination fee if the Dialog deal is terminated.
- ATML +4.7% premarket to $8.04.
- Prior Atmel M&A coverage
Wed, Jan. 6, 6:10 PM
- Bloomberg reports Microchip (NASDAQ:MCHP) is reconsidering its offer to acquire Atmel (NASDAQ:ATML). Atmel has fallen to $8.00 after hours as a result.
- Reuters reported on Monday Microchip, believed to be the unnamed suitor Atmel has reported receiving a $9/share offer from, planned to submit a binding offer for Atmel by early next week. However, it added Microchip's due diligence process had taken longer than expected due to concerns about weakening business trends facing Atmel.
- If Microchip backed out, the coast would be clear for Dialog Semi (OTC:DLGNF) to acquire Atmel via the cash/stock deal that was struck in September.
Mon, Jan. 4, 4:15 PM
- Reuters reports Microchip (MCHP -1.3%) plans to submit a binding offer for Atmel (ATML +0.8%) by early next week. It adds the microcontroller makers have "made some progress" in M&A talks, and that Microchip's due diligence process has taken longer than expected due to worries about "weaker business trends facing Atmel."
- Reuters reported in mid-December Microchip had made a $9/share offer for Atmel. Atmel, still officially set to be acquired by Dialog Semi (OTC:DLGNF) in a cash/stock deal, previously disclosed it had received a new buyout offer, but didn't name the suitor.
- Atmel caught a slight bid on Reuters' report just before the close. Shares closed today at $8.68.
Dec. 15, 2015, 3:11 PM
- Reuters reports Microchip (MCHP +2.4%) is the undisclosed suitor Atmel (ATML -0.7%) reported last Friday it had received a buyout offer from. The suitor is offering Atmel shareholders $9/share in cash, with an option to receive up to $1B of their payout in stock.
- At the time, Atmel said the offer "would reasonably be expected" to yield a superior proposal to Atmel's cash/stock deal to be acquired by U.K. power management chipmaker Dialog Semi (OTC:DLGNF). Dialog's shares fell 1.1% in Frankfurt today (after initially seeing bigger losses) in response to a Q4 warning.
- Microchip's shares have added slightly to their Tuesday gains in response to the report, while Atmel's have slightly pared their Dialog-induced losses. Acquiring Atmel, a fellow microcontroller maker, would give Microchip greater scale as it squares off against NXP/Freescale (just merged), Texas Instruments, Reneaas, Infineon, and other rivals.
Jun. 19, 2015, 4:43 PM
- Texas Instruments (NASDAQ:TXN) could be gearing up to make the next big deal in what already has been a record-breaking year for M&A in the semiconductor industry, bankers and analysts tell Reuters.
- TXN is said to be looking for large acquisitions, and held talks to acquire Maxim Integrated Products (NASDAQ:MXIM) late last year but the company decided not to sell itself; analysts say TXN also could look at Analog Devices (NASDAQ:ADI), Linear Technology (NASDAQ:LLTC), Microchip Technology (NASDAQ:MCHP), Intersil (NASDAQ:ISIL) and Atmel (NASDAQ:ATML).
- FBR analyst Christopher believes TXN should act by the end of the year while NXP, one of its fastest growing rivals, is tied up awaiting approval for its merger with Freescale Semiconductor; TXN reportedly considered buying Freescale before NXP acquired it in March.
May 7, 2015, 4:35 PM
- Along with its FQ4 results, Microchip (NASDAQ:MCHP) announces it's buying analog/mixed-signal chipmaker Micrel (NASDAQ:MCRL) for $14/share, or $744M net of cash. Micrel shareholders can opt to be paid either in cash or stock.
- The price represents a modest 4% premium to Micrel's Thursday close. Microchip notes the price is 30% above where Micrel traded before activist Starboard Value disclosed a 12% stake last August, thus fueling hopes Micrel will take part in the chip industry's consolidation wave.
- The deal is expected to close in early calendar Q3. No word yet on expected post-merger cost synergies. Micrel's chips often go into hardware Microchip aims to sell microcontrollers for. Last year, Microchip bought Bluetooth chipmaker ISSC for $294M.
- Microchip has also announced it's expanding its buyback authorization to 20M from the 2.5M that it previously had remaining. The company's FQ4 diluted share count was 220.9M.
- FQ1 guidance is for revenue $547M-$564M and EPS of $0.69-$0.73, almost entirely below a consensus of $568.3M and $0.74. Many peers have also provided soft guidance.
- Microchip is nearly unchanged AH.
Nov. 17, 2014, 9:46 AM
- A month after Qualcomm announced it's buying CSR (CSRE -0.3%) for $2.5B, Microchip (MCHP +0.4%) says it has ended discussions regarding a bid of its own.
- Microchip said in August it has held buyout talks with CSR, whose Bluetooth, GPS, and A/V chips target many of the same end-markets as Microchip's microcontrollers. But the company called the talks "very preliminary."
Aug. 28, 2014, 6:20 PM
- Microchip (MCHP +0.8%) confirms it has held talks with CSR (CSRE +35.3%) about "ways in which [Microchip's] relationship with CSR could be advanced, including possibly an acquisition of CSR." However, the talks are said to be "at a very preliminary stage."
- Microchip, whose microcontrollers are sometimes found within products that also contain CSR's Bluetooth, GPS, or A/V chips, notes it has partnered with CSR in the past, with a Bluetooth module initiative being one example.
- Back in May, Microchip announced it's buying Taiwanese Bluetooth chipmaker ISSC for $294.3M. The company has also snapped up analog chipmaker Supertex, as it takes part in a broader chip industry M&A wave.
- Earlier: CSR turns down Microchip's buyout offer
Aug. 28, 2014, 7:14 AM| Aug. 28, 2014, 7:14 AM
May 22, 2014, 9:28 AM
- Microchip (MCHP) is paying NT$143/share ($4.74/share) in cash to acquire all outstanding ISSC shares on Taiwan's GreTai Securities Market. The deal has an equity value of $328.5M, and an enterprise value (excludes net cash) of $294.3M. It's expected to close later in 2014.
- ISSC had 2013 revenue of $69.2M, and an op. margin of 18.9% The company's Bluetooth ICs for headsets, PC peripherals, car stereos, speakers, and game controllers, among other products.
- Microchip, which sells microcontrollers and other products into many of ISSC's markets, expects the deal to be immediately accretive. The company no doubt hopes to tap a growing market for embedded/wearable Bluetooth-enabled devices.
- Is a semi consolidation wave underway? The deal is the latest in a string of industry mergers/acquisitions that includes Avago/LSI and RF Micro/TriQuint. RBC recently cited the industry's transition into "a more mature era" as a reason for becoming bullish on it.
- Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Feb. 10, 2014, 7:36 AM| Feb. 10, 2014, 7:36 AM | 2 Comments
Jun. 3, 2013, 2:37 PM
Microchip's (MCHP +0.1%) Silicon Storage unit (acquired in 2010) is buying memory IP developer Novocell Semiconductor. Terms are undisclosed, but Microchip says the deal will be immediately accretive. Novocell specializes in creating designs for one-time programmable memory that can deliver superior reliability thanks to its use of antifuse tech. Novocell asserts its ability to support standard CMOS silicon leads to lower manufacturing costs. (PR)| Jun. 3, 2013, 2:37 PM
Nov. 26, 2012, 7:56 AMA fund backed by the Japanese government is set to pay $2.2B to buy 2/3 of chipmaker Renesas (RNECY.PK) from current owners Mitsubishi, NEC, and Hitachi, a source tells the Nikkei. Renesas, which rose 16.6% in Tokyo on the report, would reportedly shutter factories and cut as many as 5K jobs as part of the deal. Renesas is the top player in the microcontroller market, where it competes with Microchip, Freescale, STMicroelectronics, and others. | Nov. 26, 2012, 7:56 AM