Mon, Jun. 13, 6:45 PM
- A Chinese consortium featuring JAC Capital and Wise Road Capital is buying NXP's (NASDAQ:NXPI) Standard Products unit for $2.75B. Bloomberg reported in April the business is on the block, and that NXP "may seek at least $2 billion" for it.
- The deal is expected to close in Q1 2017. Standard Products, which supplies analog and power management chips for numerous end-markets, saw revenue drop 15% Y/Y in Q1 to $274M. Its 2015 revenue totaled $1.2B.
- ~11K workers, manufacturing facilities in the U.K. and Germany, and back-end facilities in China, Malaysia, and the Philippines will be transferred as part of the deal. NXP says the sale will allow it to "continue to focus on its High-Performance Mixed Signal business, furthering our Secure Connections for a Smarter World strategy." Last year, JAC bought NXP's base station power amplifier business for $1.8B, a deal that was needed to win regulatory support for the Freescale acquisition.
Dec. 7, 2015, 1:26 PM
- Less than two weeks after Chinese and U.S. approval was announced, NXP (NXPI -3.4%) and Freescale (FSL -2.8%) have officially closed their merger, a deal that's one of the chip industry's largest in history and which creates the biggest player in the fragmented microcontroller market.
- As previously announced, NXP is paying $6.25/share in cash + 0.35 shares (current value of $30.60) for each Freescale share. NXP forecasts immediate EPS accretion and $200M/year in 2016 cost synergies, with "a clear path" to $500M/year in synergies.
- NXP and Freescale are off on a day the Nasdaq is down 1%. During a Bloomberg interview, NXP CEO Richard Clemmer promises the post-merger company "can outgrow the semiconductor industry by 50%."
Nov. 27, 2015, 2:08 PM
- NXP Semiconductors (NASDAQ:NXPI) jumped 4.6% in the short session today, and Freescale (NYSE:FSL) gained 4%, after the two won approval from China's Ministry of Commerce to finish their $40B merger -- a last major hurdle to the deal.
- The EU and U.S. FTC had signed off previously. The companies now expect to close Dec. 7, concurrent with the divestment of NXP's RF amplifier unit.
- The two have predicted $500M in eventual annual cost synergies, and have targeted $200M in cost savings in the first year after closing. NXP expects it to be accretive to EPS and free cash flow.
- Previously: NXP +6%, Freescale +5.5%; U.S. clears NXP's RF amplifier unit sale (Nov. 24 2015)
- Previously: NXP rallies following FBR Top Pick call, takes Freescale with it (Nov. 18 2015)
Nov. 24, 2015, 10:35 AM
- The Committee on Foreign Investment in the United States (CFIUS) has signed off on the $1.8B sale of NXP's (NASDAQ:NXPI) base station RF amplifier unit to China's JAC Capital.
- The sale, announced in May, is now expected to close on Dec. 7. It's meant to address antitrust concerns about NXP and Freescale's (NYSE:FSL) combined base station amplifier share following their planned merger.
- NXP and Freescale have jumped in response to the news. The companies are still targeting a 2H15 close for the merger; EU regulators approved it in September.
Sep. 17, 2015, 1:10 PM
- As expected, the EU has signed off on NXP's (NXPI +0.6%) pending cash/stock merger with Freescale (FSL +0.6%). Shares of both companies have risen slightly in response.
- Regulators note the $1.8B sale of NXP's base station power amplifier unit to China's JAC Capital addresses antitrust concerns related to NXP/Freescale's combined base station amplifier share. The deal will still create a huge player in the microcontroller market - Gartner estimates Freescale and NXP were the market's #2 and #5 players in 2014 - but plenty of competition exists.
Jul. 2, 2015, 2:05 PM
- As expected, NXP (NXPI -0.1%) and Freescale (FSL +0.2%) shareholders have signed off on the companies' cash/stock merger. In addition, NXP has added Glen Capital Partners' Greg Summe and Permira Advisers partner Peter Smitham to the board, effective as of the merger's closing.
- NXP/Freescale still expect the deal to close in 2H15. As previously announced, Freescale shareholders will receive $6.25 in cash and 0.35 NXP shares for each share they own - at current levels, that spells a payout of $40.58/share.
- In May, NXP reached a $1.8B deal to sell its RF Power unit to China's JAC Capital, thus appeasing regulators worried about NXP/Freescale's combined base station power amplifier share.
May 28, 2015, 6:18 PM
- Continuing a string of chip asset purchases by Chinese firms, Beijing's JAC Capital is buying NXP's (NASDAQ:NXPI) RF Power unit (makes base station power amplifiers) for $1.8B in cash. The deal is expected to close in 2H15.
- NXP will use the proceeds to help pay for the $2B cash portion of its pending acquisition of Freescale (NYSE:FSL). With Freescale also a major player in the base station amplifier market, NXP had previously announced it would sell its RF unit to keep regulators happy.
- Pac Crest (Overweight) notes JAC is paying ~4x sales (in-line with peer valuations), and that the deal price is towards the high end of the $1B-$2B range estimated by the firm. It sees a $0.40 dilutive impact to 2016 EPS. Bernstein (Outperform) was only expecting a sale to reap $500M-$1B.
- NXP and Freescale both closed up fractionally today following the announcement. They rallied yesterday with the help of Broadcom/Avago merger reports (confirmed this morning).
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
Mar. 10, 2015, 2:02 PM
- NXP (NXPI -0.7%) is buying Athena SCS, a British provider of embedded software/cryptography solutions for smart cards and related systems. Terms are undisclosed.
- Athena's products cover payment, transportation, and electronic document cards, among others. The company also offers a line of card readers, and software for NFC modules and readers.
- NXP, a major player in both the smart card controller and NFC module markets, asserts the deal will help it deliver "secure solutions across a multitude of applications in the areas of Internet of Things (IoT), Industry 4.0, Automotive and Identification." To date, Athena has partnered with NXP and other chipmakers to bring its products to market.
- The news comes just over a week after NXP announced it's $16.7B merger with Freescale. Shortly before that, NXP launched two new secure microcontroller lines.
Mar. 4, 2015, 4:17 PM
- Avago (NASDAQ:AVGO) held "advanced talks" to buy microcontroller/network processor/base station amplifier maker Freescale (NYSE:FSL) before the chipmaker agreed to a $16.7B deal with NXP (NASDAQ:NXPI), Reuters reports.
- Avago reportedly got cold feet after Freescale's shares surged on an NY Post M&A report last month. However, sources state the company is "still looking for an acquisition that could be transformative."
- Over the last 15 months, Avago has struck a $6.6B deal to buy LSI (it later sold parts of LSI to Seagate and Intel), a $309M deal to buy PLX Technology, and (most recently) a $609M deal to buy Emulex, expanding into a number of enterprise hardware markets along the way.
- $31B worth of chip industry M&A deals took place last year, as chipmakers large and small try to reap cost and product synergies by merging with peers.
- Avago rose 0.9% today to $129.40, leaving it close to Monday's all-time high of $130.87.
Mar. 1, 2015, 9:56 PM
- Shortly after Reuters reported a deal was close, NXP (NASDAQ:NXPI) has announced it's buying Freescale (NYSE:FSL) for $6.25/share in cash and 0.35 NXP shares for each Freescale share owned.
- Based on NXP's Friday's close, the deal has a value of $36.14/share, nearly even with Freescale's Friday close. It has an equity value of $11.8B, and an enterprise value of $16.7B after factoring Freescale's net debt.
- Freescale shareholders will own 32% of the post-merger company. NXP will pay for the deal with $1B in cash on hand, $1B in new debt, and 115M shares. It's expected to close in 2H15.
- The companies predict $200M/year in cost savings in the first year after closing, and $500M/year eventually. They assert the post-merger company will be "the market leader in automotive semiconductor solutions and the market leader in general-purpose microcontroller (MCU) products." NXP promises the acquisition will be accretive to both EPS and free cash flow.
Mar. 1, 2015, 7:45 PM
- NXP (NASDAQ:NXPI) is close to buying fellow microcontroller vendor Freescale (NYSE:FSL) for a slight premium to Freescale's current ($11.1B) market cap, two sources tell Reuters. The deal would be the biggest in the chip industry's 18-month-long consolidation wave, creating a company with a ~$32B valuation (~$40B after debt) and expected 2015 sales of $12.2B.
- Two weeks ago, Freescale's shares jumper on reports it's exploring a sale; they've more than doubled from their October lows. In addition to making NXP a top player in the fragmented microcontroller market, acquiring Freescale would give NXP sizable network processor, analog/sensor IC, and RF power amplifier businesses.
- Freescale's network processor and amplifier ops have strong 4G base station exposure, while its microcontroller business depends heavily on auto and industrial sales. The company has relatively little consumer hardware exposure.
- Freescale currently trades for 17x 2015E EPS, and is expected by the Street to post 5% 2015 revenue growth. NXP trades for 15x 2015E EPS, and is expected to post 11% revenue growth. If recent deals are any sign, the companies will argue a merger can deliver major cost synergies.
- Update: NXP and Freescale have officially announced the deal.
Feb. 23, 2015, 6:51 PM
- NXP (NASDAQ:NXPI) has finished acquiring chipmaker Quintic's Bluetooth Low Energy (a.k.a. BTLE or Bluetooth Smart) and wearable chip businesses. The deal provides NXP with 65 U.S. and Chinese engineers, as well as "significant IP assets, including more than 60 US and Chinese patents." Terms are undisclosed.
- NXP adds it has recently "seen significant share gains in the BTLE market, with 400-500% revenue growth in 2015 versus last year," and that Quintic "has gained further traction with wearables, consumer health and mobile customers" since the purchase was first announced in November.
- Broadcom and (via CSR) Qualcomm are also going after the Bluetooth Smart IC market, looking to address surging demand from the embedded/wearables market. Apple bought Bluetooth Smart chipmaker Passif Semi back in 2013.
- Previously: NXP forms Chinese power management chip JV
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. 6, 2014, 5:03 PM
- VentureBeat reports the iPhone 6 (AAPL -0.3%) will feature an NFC radio and wireless charging support to go with its (widely expected) larger display. Support for Cat-6 LTE - theoretical max speeds of 300Mbps, 2x that of the iPhone 5S/5C's Cat-4 modem - is also reportedly on tap.
- An NFC radio would likely help enable Apple's rumored mobile payments service. Top NFC chipmaker NXP (NXPI) must be pleased to see the report, which comes as Chinese carriers get set to adopt NFC on a large scale.
- TechCrunch reports Apple has bought Spotsetter, developer of a local search app that relied on social media info, reviews, and other data to recommend local businesses over a map-based UI.
- The purchase meshes with Apple's growing mapping/search investments. It bought Twitter search engine Topsy last December, and this week showed off a big overhaul for its Spotlight search tool.
- Brian White's Apple Monitor (tracks the sales of Apple-dependent Taiwanese suppliers) is up 6%-7% M/M in May, much better than a 9-year average of 2%. White sees the Apple Monitor rising 18%-20% Q/Q for the whole of Q2, ahead of the iPhone 6 launch.
- Earlier: Apple roundup
NXP Semiconductors NV engages in the provision of secure connectivity solutions for embedded applications. It operates through the High Performance Mixed Signal and Standard Products segments. The High Performance Mixed Signal segment delivers high performance mixed signal solutions to customers... More
Industry: Semiconductor - Broad Line
Country: United States