Microsemi Corporation (MSCC) - NASDAQ
  • Wed, Mar. 23, 4:32 PM
    • Analog/mixed-signal and telecom chipmaker Microsemi (NASDAQ:MSCC) is selling its embedded security, RF/microwave, and custom microelectronics businesses to embedded processing module/subsystem maker Mercury Systems (NASDAQ:MRCY) for $300M in cash.
    • The deal is expected to close in calendar Q2. Microsemi declares the sale frees up capital "for the ongoing development of proprietary, higher-value solutions for our aerospace & defense, communications, industrial and storage end markets," and pay down debt raised to finance the PMC-Sierra acquisition. The company also uses the occasion to affirm its FQ2 (calendar Q1) guidance.
    • Mercury notes the acquired businesses had revenue of $100M and adjusted EBITDA of $28M in Microsemi's FY15 (ended last September), and predicts the deal will be "highly accretive" to its FY17 (ends June '17) EPS and adjusted EBITDA margin. It's paying for the purchase via $50M in existing cash + a $265M term loan, and also taking out a $75M credit facility that won't be tapped for now.
    • Mercury: "The transaction adds secure solid-state storage to our array of industry-leading, pre-integrated processing subsystems capabilities. It nearly doubles the size of our RF and Microwave business, adding new capabilities, scale and synergies. In addition, it provides us with new capabilities in embedded security and mixed signal system-on-chip processing. All these capabilities are highly aligned with our business from a strategic perspective..."
    • Microsemi is unchanged after hours. Mercury is up 3% to $16.99.
    • PRs: Microsemi, Mercury Systems
    | Wed, Mar. 23, 4:32 PM | 1 Comment
  • Tue, Feb. 2, 2:42 PM
    • On a day the Nasdaq is down 2.1%, many chip stocks are seeing outsized losses (SOXX -3.1%) after IDT (IDTI -28.3%), a mixed-signal chipmaker selling into the server, networking/telecom infrastructure, and wireless charging markets (among others), offered soft FQ4 (calendar Q1) guidance to go with an FQ3 sales beat.
    • Major decliners include diversified European chipmakers NXP (NXPI -4.7%) and STMicroelectronics (STM -7%), microcontroller maker Cypress Semi (CY -6.9%), RF chipmaker Qorvo (QRVO -6.4%), motion sensor developer InvenSense (INVN -6%), chip packaging/testing firm Amkor (AMKR -6.1%), and analog/mixed-signal chipmakers MagnaChip (MX -9.8%), Inphi (IPHI -9.1%), Silicon Labs (SLAB -5%), Microsemi (MSCC -4.4%), Semtech (SMTC -5.4%), and Power Integrations (POWI -5.5%). Previously covered: Pixelworks, ON Semi.
    • IDT reported Chinese telecom infrastructure demand is "normalizing to slightly less than the peak levels seen in late calendar 2014," that data center customer growth rates have slowed slightly, and that consumer demand has been affected by increased "customer smartphone shipment volatility." Both Apple and Samsung's sales have been under pressure.
    • BofA/Merrill has downgraded IDT to Neutral, while Wedbush's Betsy Van Hees has gone contrarian and upgraded to Outperform. Van Hees argues IDT is still positioned to see strong FY17 growth, aided by the ramp of LRDIMM DRAM chipsets for Intel's Broadwell server CPU launch and the ramp of wireless charging IC programs at tier-1 OEMs.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Tue, Feb. 2, 2:42 PM | 5 Comments
  • Fri, Jan. 29, 9:44 AM
    • Microsemi (MSCC +4.7%) is higher following its FQ1 report. Though FQ1 sales ($329.2M) officially beat consensus by $1.8M, Microsemi had already pre-announced revenue would be near the high end of a $325M-$329M guidance range.
    • FQ2 guidance is for revenue of $435M-$455M and EPS of $0.62-$0.68; consensus, which doesn't appear to fully account for the recently-closed PMC-Sierra acquisition, is at $367.2M and $0.74.
    • Non-GAAP gross margin (benefits from Microsemi's exposure to high-end analog/mixed-signal markets) rose 60 bps Q/Q and 90 bps Y/Y in FQ1 to 57.1%. On its earnings call (transcript), Microsemi mentioned its quarterly book-to-bill was above 1.
    • The company estimates 23% of FQ1 sales came from FPGAs and SoCs, 34% from mixed-signal RF chips, 17% from timing ICs, and 26% from discrete analog chips; Microsemi asserts it's gaining FPGA share. The telecom/networking, aerospace, and defense markets saw healthy demand, while industrial/medial sales were pressured by declining oil exploration activity.
    • Regarding the PMC deal, Microsemi reiterates it expects over $0.40 in EPS accretion in time, and that 75% of annualized synergies (targeted at $100M) will be achieved by the end of FQ3.
    • Microsemi's FQ1 results, earnings release
    | Fri, Jan. 29, 9:44 AM | 1 Comment
  • Mon, Jan. 11, 5:47 PM
    • Microsemi (NASDAQ:MSCC) will replace Atwood Oceanics (NYSE:ATW) in the S&P MidCap 400 after the close on Friday, the same day the company's $2.5B purchase of PMC-Sierra is expected to close. Atwood will take Microsemi's spot in the S&P SmallCap 600.
    • MSCC +2% after hours to $31.47. Shares rose 6.4% in regular trading after Microsemi hiked its Q4 sales guidance and announced the PMC deal is expected to close in four days. Atwood is currently unchanged after hours.
    | Mon, Jan. 11, 5:47 PM
  • Mon, Jan. 11, 9:35 AM
    • Microsemi (NASDAQ:MSCC) now expects FQ1 revenue to to be near the high end of a $325M-$329M guidance range; consensus is at $326.2M. FQ1 results are due on the afternoon of Jan. 28.
    • The company adds it has obtained (through a $450M debt offering and credit facility commitments) the financing needed to close its $2.5B cash/stock purchase of PMC-Sierra (NASDAQ:PMCS), and has also seen the end of a U.S. antitrust waiting period. Closing is expected on Friday.
    • Microsemi reiterates its goal of achieving $100M/year in deal synergies, with $75M achieved in the first full quarter of combined operations. As previously announced, Microsemi is paying $9.22 in cash and issuing 0.0771 shares for each PMC-Sierra share.
    | Mon, Jan. 11, 9:35 AM | 2 Comments
  • Nov. 24, 2015, 11:59 AM
    • Microsemi (MSCC -6%) has sold off after striking a $2.5B deal to acquire PMC-Sierra (PMCS -1.6%), thus ending a bidding war with Skyworks. PMC, which is receiving a portion of its payout in Microsemi stock, is down moderately.
    • Some concerns exist about the deal price, as well as regarding synergies between Microsemi's core analog/power management chip business and PMC's storage controller and telecom IC businesses. Microsemi, for its part, asserts the deal gives it "a leading position in high performance and scalable storage solutions, while also adding a complementary portfolio of high-value communications products." Some synergies exist between PMC's offerings and those of Ethernet chipmaker Vitesse, which Microsemi acquired earlier this year for $389M.
    • Based on Microsemi's current trading price of $34.08, the PMC deal is worth $11.84/share. PMC currently trades at $11.67.
    | Nov. 24, 2015, 11:59 AM | 3 Comments
  • Nov. 18, 2015, 7:33 AM
    • The new proposal would pay $9.22 in cash and 0.0771 shares of MSCC stock for each share of PMCS. Based on yesterday's close, this values each share of PMCS at $12.05.
    • The previous bid was for $9.04 in cash and the same amount of MSCC shares.
    • The new deal would still be immediately accretive to Microsemi's non-GAAP EPS (by $0.60 in year one) and free cash flow.
    • Previously: PMC-Sierra: Skyworks offer still superior to Microsemi bid (Nov. 2)
    • PMCS +2.4% to $11.93 premarket; MSCC flat, Skyworks SWKS +1.1%
    | Nov. 18, 2015, 7:33 AM | 28 Comments
  • Nov. 6, 2015, 4:47 PM
    • The Philadelphia Semi Index (SOXX +2.6%) rallied after Nvidia (NVDA +13.9%) beat estimates and provided strong guidance (gaming GPUs led the way), Skyworks (SWKS +7.1%) offered good calendar Q4 guidance and RF chip peer Qorvo (QRVO +23.2%) posted better-than-feared results and guidance. The Nasdaq rose just 0.4%.
    • Also: Analog/Ethernet chipmaker Microsemi (MSCC +4.9%) beat calendar Q3 revenue estimates and offered solid Q4 guidance: Revenue of $325M-$329M and EPS of $0.70-$0.74 vs. a consensus of $323.5M and $0.72.
    • Big gainers today included specialty foundry/Skyworks supplier TowerJazz (TSEM +6%), smart TV/home automation chipmaker Sigma Designs (SIGM +16.6%), telecom/networking IC provider InPhi (IPHI +6.7%), touch controller/LCD driver supplier Synaptics (SYNA +6.1%), FPGA maker Lattice Semi (LSCC +6.6%), network processor vendor Cavium (CAVM +5.6%), DSP core IP provider CEVA (CEVA +7.2%), and analog/mixed-signal chipmakers MagnaChip (MX +4.6%) and Semtech (SMTC +5.4%).
    • On its earnings call (transcript), Qorvo mentioned Chinese smartphone demand (a recent headwind) is "seeing a bit of a rebound," and that the launch of 5-mode and 6-mode Chinese 4G phones is boosting RF chip content. Qorvo also thinks Chinese base station activity (an issue for many telecom chip/component firms) bottomed in Q3, but cautions a mobile infrastructure recovery is expected to be gradual.
    • Microsemi stated on its call (transcript) broadband gateway chip sales were a Q3 strong point, that telecom infrastructure began to improve, and that defense/aerospace sales are expected to rebound in 2016. Industrial demand remained soft in Q3.
    • MKM's Ian Ing has upgraded Nvidia to Buy, calling shares "expensive and worth it." Ing: "We see a sustainable growth trajectory, given [Nvidia's] positioning to lead in significant paradigm changes favoring more valuable semiconductor solutions: automotive evolving from driver assist to autonomous driving, gaming transitioning to virtual reality and professional or social E-sports, and cloud computing increasingly using GPU accelerators for machine learning."
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    • Last week: Chip stocks sell off after NXP, STMicro, others issue soft guidance
    | Nov. 6, 2015, 4:47 PM | 1 Comment
  • Oct. 30, 2015, 12:45 PM
    • Just a few hours after Skyworks (SWKS +3%) and PMC-Sierra (PMCS +3.1%) announced they'd agreed to a revised $11.60/share, all-cash, deal (topping Microsemi's $11.50/share bid), Microsemi (MSCC -2.3%) has unveiled an $11.88/share cash/stock offer.
    • The offer consists of $9.04/share in cash + 0.0771 Microsemi shares for each PMC share. Microsemi expects a deal to add $0.60 in EPS in its first full year after closing, and to eventually produce over $100M/year in cost synergies. No word on whether Microsemi would foot the bill for the $88.5M termination fee PMC owes Skyworks if it abandons its current deal.
    • Microsemi remains lower on the day, while Skyworks and PMC remain higher. PMC is trading near $12.00.
    | Oct. 30, 2015, 12:45 PM | 17 Comments
  • Oct. 30, 2015, 9:10 AM
    • 11 days after Microsemi (NASDAQ:MSCC) unveiled an $11.50/share cash/stock offer for PMC-Sierra (NASDAQ:PMCS) that topped Skyworks' (NASDAQ:SWKS) $10.50/share deal with the company, Skyworks and PMC announce they've agreed to a revised $11.60/share, all-cash, deal.
    • The termination fee has been hiked to $88.5M from $70M. As previously announced, Skyworks plans to finance the deal with a mixture of existing cash and debt.
    • PMCS +2.9% premarket to $11.98, as markets bet the bidding war isn't over. SWKS +0.8% premarket to $75.25.
    | Oct. 30, 2015, 9:10 AM | 17 Comments
  • Oct. 19, 2015, 2:55 PM
    • The Street isn't reacting favorably to analog/mixed-signal chipmaker Microsemi's (NASDAQ:MSCC) cash/stock offer to buy storage and telecom IC vendor PMC-Sierra (PMCS +13.7%). Following today's selloff, Microsemi's bid for PMC is worth $11.35/share. With PMC trading at $11.65, investors are betting Skyworks (NASDAQ:SWKS) will up its prior $10.50/share bid.
    • S&P thinks Skyworks could raise its offer. However, Brean and Oppenheimer argue the company might walk away. Brean notes Skyworks sold off after the PMC deal was announced amid concerns about a lack of product synergies, and both firms observe Skyworks has taken a disciplined approach to M&A.
    • For Microsemi, a PMC deal would further an M&A-driven product line expansion that has led the company to buy medical/telecom IC vendor Zarlink Semi ($525M), timing IC vendor Symmetricom ($230M), and most recently Ethernet chipmaker Vitesse ($389M). The company sees PMC adding over $0.60 to EPS in the first year after closing, thanks partly to over $100M in cost synergies. It would rely on both existing cash and $2.7B in debt to help finance the purchase.
    • Raymond James' Mitch Steves has hiked his Microsemi target by $3 to $41 in response to the bid. "Overall, given the $0.60 in year one accretion and material cost savings ... we view the transaction as a positive. In addition, we came away with the following key takeaways from the Conference call: 1) leverage will remain reasonable at ~4x [trailing 12 month] EBITDA, 2) overall business is chugging along with Dec-qtr in-line with Street expectations due to [aerospace/defense]/Military/Industrial strength and 3) Vitesse cost synergies are ahead of plan giving additional comfort on cash flow metrics."
    | Oct. 19, 2015, 2:55 PM | 3 Comments
  • Oct. 19, 2015, 7:47 AM
    • PMC-Sierra (NASDAQ:PMCS) +10.8% premarket after Microsemi (NASDAQ:MSCC) offers to buy the company for $11.50/share, or ~$2.4B, in an offer MSCC says is a "superior" proposal over last week's $2B offer from Skyworks Solutions' (NASDAQ:SWKS).
    • Under MSCC's offer, PMCS shareholders would get $8.75 in cash and 0.0736 of a share of its stock for each PMCS share held; MSCC's offer represents a ~12% premium to PMCS's Friday close and ~50% above PMCS’ price on Oct. 5 before it agreed to the bid from SWKS.
    • MSCC says a takeover of PMCS would let it expand its product offering and allow the combined company save more than $100M/year in expenses.
    | Oct. 19, 2015, 7:47 AM | 9 Comments
  • May 28, 2015, 5:40 PM
    | May 28, 2015, 5:40 PM | 2 Comments
  • 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
    | May 27, 2015, 3:00 PM | 41 Comments
  • May 18, 2015, 2:10 PM
    • Many chip stocks are turning in healthy gains amid a 0.7% gain for the Nasdaq after the NY Post reported Altera (up 6.2%) has resumed buyout talks with Intel.
    • Also possibly helping: China's big-3 carriers have announced major data tariff cuts. Brean has argued the cuts are a positive for RF chipmakers Skyworks (SWKS +5.7%), Qorvo (QRVO +4.2%), and Avago (AVGO +1.9%); the companies benefit from rising 4G phone sales.
    • Aside from the aforementioned companies, today's gainers include Synaptics (SYNA +4.8%), Himax (HIMX +2.3%), and Silicon Motion (SIMO +2.3%), each of whom also has Chinese mobile exposure. Other winners include Atmel (ATML +3.7%), Microsemi (MSCC +2.6%), InPhi (IPHI +2%), Intersil (ISIL +2.5%), Silicon Labs (SLAB +2.5%), IDT (IDTI +2.3%), and MaxLinear (MXL +3.5%).
    • Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | May 18, 2015, 2:10 PM | 1 Comment
  • Apr. 24, 2015, 12:47 PM
    • In addition to slightly missing FQ2 revenue estimates (while beating on EPS), Microsemi (NASDAQ:MSCC) has guided for FQ3 revenue of $302M (+/- 2%); the midpoint is below a $303.7M consensus. EPS guidance of $0.67-$0.71 is in-line with a $0.69 consensus.
    • The high-end analog/mixed-signal chipmaker was up 26% YTD going into earnings, aided by enthusiasm about the Vitesse acquisition. Several peers have also provided soft sales guidance.
    • Driving the FQ2 EPS beat: Gross margin (non-GAAP) rose to 57.1% from 56.2% in FQ1 and 55.2% a year ago. Op. margin rose to 25.6% from 24.4% and 20.7%.
    • FQ2 results, PR
    | Apr. 24, 2015, 12:47 PM
Company Description
Microsemi Corp. designs, manufactures and markets analog and mixed-signal semiconductor solutions differentiated by power, security, reliability and performance. The company products include radio frequency and power components, analog and RF integrated circuits, standard and customizable... More
Sector: Technology
Industry: Semiconductor - Integrated Circuits
Country: United States