The purchase price of about $8.36 per share consists of $3.25 per share in cash and 0.1089 shares of MACOM (NASDAQ:MTSI) for each share of Applied Micro (NASDAQ:AMCC). That would be a 15.4% premium to Friday's close of $7.25.
The deal value is roughly $770M.
It's MACOM's intention to divest Applied Micro's Compute business within the first 100 days after closing.
MACOM expects the deal to be accretive to non-GAAP EPS in the fiscal year ending Sept. 2017.
Alex Henderson recommends Oclaro (OCLR +1.5%), NeoPhotonics (NPTN +1.9%), Lumentum Holdings (LITE -2.5%), Fabrinet (FN +0.9%), Finisar (FNSR +0.3%), Inphi (IPHI -0.1%), II-VI (IIVI +1.8%), GigPeak (GIG) and M/A-COM Technology Solutions Holdings (MTSI +0.5%) despite recent pullback in the sector.
On Acacia Communications (ACIA +0.2%), considers "overcorrected" and sees a reversal in movement on projected strong Q4 guidance and 2017 upside. Acacia Communications was further initiated with an Outperform rating at William Blair earlier this morning.
The sanctions placed by the Commerce Department on U.S. parts/equipment sales to ZTE are just a "temporary setback" for optical component firm Oclaro (OCLR -15.4%), insists Piper's Troy Jensen. He thinks a majority of the Oclaro shipments due for ZTE can be sent to other Chinese equipment makers, and considers Oclaro's revised guidance "extremely conservative."
Jensen adds the selloff seen today in RF chipmaker M/A-COM (MTSI -4.3%) was also unjustified, given ZTE isn't a major direct customers. Meanwhile, Northland Securities' Tim Savageaux has joined in defending Oclaro, asserting the sanctions are only a short-term issue for the company and that ZTE's optical system rivals will benefit from its woes.
Oclaro peer Lumentum (LITE -3.3%) has issued a short PR after the close in which it states ZTE accounted for less than 1% of its sales during the first half of FY16 (ends in June), and that recent ZTE business levels "have not been material."
Earlier: Optical component firms sell off after ZTE hit with sanctions
Aeroflex, a maker of high-reliability chips for the space and radiation-hardened semi markets, is selling its diode IC business to M/A-COM (MTSI +1.6%) for $38M in cash. With the business having 2014 revenue of $37M, M/A-COM is paying ~1x sales.
The deal will be financed via cash on hand, and is expected to be accretive to EPS once all integration work is done. M/A-COM declares the purchase extends the company's leadership position in RF and microwave diodes, while allowing it to expand into the market for JAN-certified diodes and transistors.
The acquisition comes shortly after M/A-COM closed a $60M deal (also all-cash) to buy Japanese optical networking sub-assembly maker FiBest.