Silicon Motion sold for $8B

MaxLinear to acquire Silicon Motion for $114.34 per share consideration

MaxLinear (MXL) and Silicon Motion (SIMO) announced that they have entered into a definitive agreement under which MaxLinear will acquire Silicon Motion in a cash and stock transaction that values the combined company at $8B in enterprise value.

Combined revenues are expected to be more than $2B annually and are supported by the technology breadth to address a total market opportunity of roughly $15B.

The transaction is expected to generate annual run-rate synergies of at least $100M to be realized within 18 months after the transaction closes and is expected to be immediately and materially accretive to MaxLinear’s non-GAAP earnings per share and cash flow.

Under the terms of the definitive agreement, the transaction consideration will consist of $93.54 in cash and 0.388 shares of MaxLinear stock for each Silicon Motion ADS and $23.385 in cash and 0.097 shares of MaxLinear common stock for each Silicon Motion ordinary share not represented by an ADS.

Upon closing of the transaction, MaxLinear shareholders will own approximately 86% of the combined company and Silicon Motion stockholders will own approximately 14% of the combined company.

Based on the closing price of MaxLinear shares on May 4, the implied value of the total transaction consideration for Silicon Motion is $3.8B. MaxLinear intends to fund the $3.1B of cash consideration with cash on hand from the combined companies and fully committed debt financing from Wells Fargo Bank, N.A.

The transaction is not subject to any financing conditions and is expected to close by the first half of calendar 2023, pending satisfaction of customary closing conditions, including Silicon Motion shareholders’ approval and regulatory approvals in various jurisdictions.

Silicon Motion Technology Corporation designs, develops, and markets NAND flash controllers for solid-state storage devices. It offers controllers for computing-grade solid state drives (SSDs), which are used in PCs and other client devices; enterprise-grade SSDs used in data centers; eMMC and UFS mobile embedded storage for use in smartphones and IoT devices; flash memory cards and flash drives for use in expandable storage; and specialized SSDs that are used in industrial, commercial, and automotive applications.

SIMO last traded $96.52. MXL last traded at $44.26.

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NeoPhotonics sold for $918M

 Lumentum to acquire NeoPhotonics for $16 per share in cash

Lumentum (LITE) and NeoPhotonics (NPTN) announced that they have entered into a definitive agreement under which Lumentum will acquire NeoPhotonics for $16.00 per share in cash, which represents a total equity value of approximately $918M.

NeoPhotonics Corporation develops, manufactures, and sells optoelectronic products that transmit and receive high speed digital optical signals for cloud and hyperscale data center internet content provider and telecom networks worldwide.

Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The company operates in two segments, Optical Communications (OpComms) and Commercial Lasers (Lasers). 

Laser chips made by Lumentum

The transaction has been unanimously approved by the boards of directors of both companies.

The purchase price represents a premium of approximately 39% to NeoPhotonics’ closing stock price on November 3, 2021.

Laser chips made by NeoPhotonics

Lumentum intends to finance the transaction through cash from the combined company’s balance sheet.

Related to the transaction, Lumentum will provide up to $50M in term loans to NeoPhotonics to fund anticipated growth, which may require increased working capital and manufacturing capacity.

The transaction is expected to close in the second half of calendar year 2022, subject to approval by NeoPhotonics’ stockholders, receipt of regulatory approvals, and other customary closing conditions.

“With NeoPhotonics, we’re making another important investment in better serving our customers and expanding our photonics capabilities at a time when photonics are at the forefront of favorable long-term market trends. At the center of our strategy is a relentless focus on developing a differentiated portfolio with the most innovative products and technology in our industry so that we can help our customers compete and win in their respective markets.

Adding NeoPhotonics’ differentiated products and technology and innovative R&D team is consistent with this strategy and together, we will better meet the growing need for next generation optical networking solutions. We are confident this transaction will make us an even better partner to our customers, while enabling our team to deliver significant, long-term value to our stockholders. We look forward to welcoming NeoPhotonics’ talented team of employees to Lumentum,” said Alan Lowe, Lumentum President and CEO.

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Inphi Corp. sold for about $155 per share

Marvell to acquire Inphi in cash and stock deal

Marvell Technology Group (MRVL) and Inphi Corporation (IPHI) announced a definitive agreement, unanimously approved by the boards of directors of both companies, under which Marvell will acquire Inphi in a cash and stock transaction.

Israel’s Marvell buys rival Inphi Corp.

In conjunction with the transaction, Marvell intends to reorganize so that the combined company will be domiciled in the United States, creating a U.S. semiconductor powerhouse with an enterprise value of approximately $40B.

Under the terms of the definitive agreement, the transaction consideration will consist of $66 in cash and 2.323 shares of stock of the combined company for each Inphi share.

Inphi sold to Marvell

Upon closing of the transaction, Marvell shareholders will own approximately 83% of the combined company and Inphi stockholders will own approximately 17% of the combined company.

Marvell intends to finance the transaction with cash on hand, and additional financing. Marvell has obtained debt financing commitments from JPMorgan Chase Bank, N.A.

The transaction is not subject to any financing condition and is expected to close by the second half of calendar 2021, subject to the approval of Marvell shareholders and Inphi stockholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.

“Our acquisition of Inphi will fuel Marvell’s leadership in the cloud and extend our 5G position over the next decade,” said Matt Murphy, president and CEO of Marvell.

“Inphi’s technologies are at the heart of cloud data center networks and they continue to extend their leadership with innovative new products, including 400G data center interconnect optical modules, which leverage their unique silicon photonics and DSP technologies.

We believe that Inphi’s growing presence with cloud customers will also lead to additional opportunities for Marvell’s DPU and ASIC products.”

“Our acquisition of Inphi will fuel Marvell’s leadership in the cloud and extend our 5G position over the next decade,” said Matt Murphy, president and CEO of Marvell.

“Inphi’s technologies are at the heart of cloud data center networks and they continue to extend their leadership with innovative new products, including 400G data center interconnect optical modules, which leverage their unique silicon photonics and DSP technologies. We believe that Inphi’s growing presence with cloud customers will also lead to additional opportunities for Marvell’s DPU and ASIC products.”

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Xilinx sold for $35 billion

Xilinx to be acquired by AMD for $35B in all-stock transaction

AMD (AMD) and Xilinx (XLNX) announced they have entered into a definitive agreement for AMD to acquire Xilinx in an all-stock transaction valued at $35B.

Under the terms of the agreement, Xilinx stockholders will receive a fixed exchange ratio of 1.7234 shares of AMD common stock for each share of Xilinx common stock they hold at the closing of the transaction.

Xilinx makes programmable logic devices

Based on the exchange ratio, this represents approximately $143 per share of Xilinx common stock. Post-closing, current AMD stockholders will own approximately 74% of the combined company on a fully diluted basis, while Xilinx stockholders will own approximately 26%.

The transaction is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

AMD expects to achieve operational efficiencies of approximately $300 million within 18 months of closing the transaction, primarily based on synergies in costs of goods sold, shared infrastructure and through streamlining common areas.

AMD goes shopping taking advantage of Intel’s troubles

The transaction has been unanimously approved by the AMD and Xilinx Boards of Directors.

The acquisition is subject to approval by AMD and Xilinx shareholders, certain regulatory approvals and other customary closing conditions.

The transaction is currently expected to close by the end of calendar year 2021.

Until close, the parties remain separate, independent companies. Dr. Lisa Su will lead the combined company as CEO. Xilinx President and CEO, Victor Peng, will join AMD as president responsible for the Xilinx business and strategic growth initiatives, effective upon closing of the transaction.

In addition, at least two Xilinx directors will join the AMD Board of Directors upon closing.

Xilinx, Inc. designs and develops programmable devices and associated technologies worldwide. The company offers integrated circuits (ICs) in the form of programmable logic devices (PLDs), such as programmable system on chips, and three dimensional ICs; adaptive compute acceleration platform; software design tools to program the PLDs; software development environments and embedded platforms; targeted reference designs; printed circuit boards; and intellectual property (IP) core licenses covering Ethernet, memory controllers, Interlaken, and peripheral component interconnect express interfaces, as well as domain-specific IP in the areas of embedded, digital signal processing and connectivity, and market-specific IP cores. XLNX closed at $114.55.

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Arm Holdings sold for $40 billion

Nvidia to buy Arm Holdings from Softbank

Nvidia (NVDA) confirmed that it intends to buy chip design giant Arm Holdings for a total of up to $40 billion from existing owner SoftBank (SFTBY), which bought the company for $32 billion in 2016.

Arm Holdings chips power smart phones

SoftBank  will immediately receive $2 billion in cash for signing the deal. Then, it will receive another $10 billion in cash and $21.5 billion of stock in Nvidia at closing. That stake will be likely just a bit shy of 10% of the company.

Softbank bought Arm in 2016 for $32 billion

In addition, SoftBank is slated to earn $5 billion in a mix of cash and stock as a performance-based earn-out. Conditions or timing for that earn-out were not disclosed.

Nvidia buys Arm Holdings for $40 billion

Analysts’ Comments

Should Nvidia’s (NVDA) acquisition of SoftBank’s (SFTBY) ARM be allowed to proceed, it would create a “landscape-changing entity” that would combine two leading GPU and CPU architectures into a “single powerful ecosystem,” Deutsche Bank analyst Ross Seymore tells investors in a research note.

However, it this point that is likely to create the pushback from competitors and customers, says the analyst. Seymore questions whether ARM licensees would support an Nvidia acquisition saying “there could be a myriad of conflict of interest issues” whereby Nvidia could have access to competitor strategies and technologies in a variety of Nvidia-targeted markets. Seymore keeps a Hold rating on Nvidia shares.

Jefferies analyst Mark Lipacis raised the firm’s price target on Nvidia (NVDA) to $680 from $570 and keeps a Buy rating on the shares after the company announced an agreement to acquire ARM Holdings, subject to regulatory approvals. He views the deal as one that is “transformative” as it should position Nvidia to capture 80% of the ecosystem value in the data center and also unify the compute ecosystem between the edge and data center, Lipacis tells investors. Assuming the deal with Softbank (SFTBY) goes through, he thinks the merged company has a five-year EPS power of $50, said Lipacis, who also raised his “bull-case” target on Nvidia shares to $1,000.

RBC Capital analyst Mitch Steves keeps his Outperform rating on Nvidia (NVDA) after the company confirmed its acquisition of ARM Holdings last night, saying the transaction would be a positive if it can close amid the likely regulatory challenges to its completion. Steves adds that if the transaction closes, it would also be a “notable negative” for Intel (INTC), stating that Nvidia’s research and development funding would compete against Intel’s currently dominant x86 market share.

Wedbush analyst Matt Bryson made no change to his Outperform rating or $525 price target for Nvidia (NVDA) after the company and SoftBank (SFTBY) finalized an agreement whereby Nvidia will purchase ARM Holdings. While Bryson views the deal terms and expected synergies as favorable for Nvidia, the analyst believes it most likely will never be consummated unless the U.S./China relationship dynamic shifts considerably.

NVDA is up 5.8% to $514 while SFTBY is up 8.7% to $29.87.

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Nanometrics and Rudolph Technologies to merge

Nanometrics, Rudolph Technologies to combine in an all-stock merger of equals

Nanometrics and Rudolph to merge, Stockwinners

Nanometrics (NANO) and Rudolph Technologies, Inc. (RTEC) announced that they have agreed to combine in an all-stock merger of equals transaction.

Nanometrics and Rudolph Technologies to merge, Stockwinners

Nanometrics Incorporated provides process control metrology and inspection systems for use primarily in the fabrication of semiconductors and other solid-state devices, and industrial and scientific applications worldwide.

Rudolph Technologies, Inc. designs, develops, manufactures, and supports process control defect inspection and metrology, advanced packaging lithography, and process control software systems used by microelectronic device manufacturers. 

The merged company will be a premier end-to-end metrology, inspection, process control software, and lithography equipment provider for the semiconductor industry and other advanced markets.

Under the terms of the agreement, which was unanimously approved by the Boards of Directors of both companies, Rudolph stockholders will receive 0.8042 shares of Nanometrics common stock for each Rudolph share.

Upon completion of the merger, current Nanometrics stockholders will own approximately 50% and current Rudolph stockholders will own approximately 50% of the combined company.

Rudolph CEO Michael Plisinski will serve as Chief Executive Officer and Rudolph CFO Steven Roth will serve as Chief Financial Officer of the combined company, alongside a highly experienced leadership team comprised of executives from both companies.

The Board of Directors will be led by Nanometrics director Christopher Seams and will have 12 directors, consisting of six from each existing Board.

The combined company will be headquartered in Wilmington, Massachusetts and will maintain a strong presence at Nanometrics’ headquarters in Milpitas, California.

The transaction is expected to close in the second half of 2019, subject to the completion of customary closing conditions, including receipt of regulatory approvals, and approval by the stockholders of each company.

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Cypress Semiconductor sold for $23.85 a share

Infineon to acquire Cypress Semi in deal with enterprise value of EUR9B

Infineon to acquire Cypress Semi in deal with enterprise value of EUR9B , Stockwinners

Infineon Technologies (IFNNY) and Cypress Semiconductor Corporation (CY) announced that the companies have signed a definitive agreement under which Infineon will acquire Cypress for $23.85 per share in cash, corresponding to an enterprise value of EUR9B.

The companies said that expected economies of scale will create cost synergies of EUR180M per annum by 2022.

The complementary portfolios will enable the offering of further chip solutions with a revenue synergies potential of more than EUR1.5B per annum in the long term.

The offer price represents a 46% premium to Cypress’s unaffected 30-day volume-weighted average price during the period from 15 April to 28 May 2019, the last trading day prior to media reports regarding a potential sale of Cypress.

Cypress expects to continue its quarterly cash dividend payments until the transaction closes.

This includes Cypress’s previously announced quarterly cash dividend of 11c per share, payable on July 18, 2019 to holders of record of Cypress’s common stock at the close of business on June 27, 2019.

The funding of the acquisition is fully underwritten by a consortium of banks. Infineon is committed to retaining a solid investment grade rating and, consequently, Infineon intends to ultimately finance approximately 30 percent of the total transaction value with equity and the remainder with debt as well as cash on hand.

The financial policy to preserve a strategic cash reserve remains in place. The acquisition is subject to approval by Cypress’s shareholders and the relevant regulatory bodies as well as other customary conditions.

The closing is expected by the end of calendar year 2019 or early 2020.

Hassane El-Khoury, President and CEO of Cypress, said:

“The Cypress team is excited to join forces with Infineon to capitalize on the multi-billion dollar opportunities from the massive rise in connectivity and computing requirements of the next technology waves. This announcement is not only a testament to the strength of our team in delivering industry-leading solutions worldwide, but also to what can be realized from uniting our two great companies. Jointly, we will enable more secure, seamless connections, and provide more complete hardware and software sets to strengthen our customers’ products and technologies in their end markets. In addition, the strong fit of our two companies will bring enhanced opportunities for our customers and employees.”

CY closed at $17.82. IFNNY closed at $17.77.

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Quantenna sold for $1.07 billion

ON Semiconductor to acquire Quantenna for $24.50 per share

Quantenna sold for $1.07 billion, Stockwinners

ON Semiconductor Corporation (ON) and Quantenna Communications, Inc. (QTNA) announced that they have entered into a definitive agreement for ON Semiconductor to acquire Quantenna for $24.50 per share in an all cash transaction.

The acquisition consideration represents equity value of approximately $1.07B and enterprise value of approximately $936M, after accounting for Quantenna’s net cash of approximately $136M at the end of fourth quarter of 2018.

The acquisition significantly enhances ON Semiconductor’s connectivity portfolio with the addition of Quantenna’s industry leading Wi-Fi technology and software capabilities.

Following consummation, the transaction is expected to be immediately accretive to ON Semiconductor’s non-GAAP earnings per share and free cash flow, excluding any non-recurring acquisition related charges, the fair value step-up inventory amortization, and amortization of acquired intangibles.

The transaction is not subject to a financing condition. ON Semiconductor intends to fund the transaction through cash on hand and available capacity under its existing revolving credit facility.

Completion of the transaction is subject to approval by Quantenna’s stockholders, regulatory approvals and other customary closing conditions.

The transaction has been approved by ON Semiconductor’s and Quantenna’s boards of directors and is expected to close in the second half of 2019.

No approval of the stockholders of ON Semiconductor is required in connection with the proposed transaction.

Note that QNTA was featured by Stockwinners on February 22 at $18.00.

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Top Stories for weekend of February 22

U.S. extends trade talk deadline with China

As a result of these very… productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1.

1. Using his Twitter account, President Donald Trump said that, “I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues.

Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!”

2. Kraft Heinz (KHC) has tapped investment bank Credit Suisse to review options for its Maxwell House coffee business, which could include a potential sale, CNBC’s Lauren Hirsch reported, citing people familiar with the matter. Based off valuations for other sales of consumer brands, a sale could fetch a price of at least $3B, sources said.

3. While investors are cheering indications of progress being made toward a resolution of trade issues between China and the U.S., the battle for tech supremacy between the two global superpowers shows few signs of abating, Reshma Kapadia wrote in this week’s edition of Barron’s. Global chip makers remain highly reliant on China, which makes just 30% of the chips it actually needs, the publication noted.

Companies with revenue exposure to china include Qualcomm (QCOM), Micron (MU), Marvell Technology (MRVL), Broadcom (AVGO), NXP Semiconductors (NXPI), AMD (AMD), Maxim Integrated Devices (MXIM), Applied Materials (AMAT), Intel (INTC), Xilinx (XLNX), Skyworks (SWKS), Nvidia (NVDA), Analog Devices (ADI), Lam Research (LRCX), and KLA-Tencor (KLAC).

How to train your dragon top the box office, Stockwinners

4. Comcast (CMCSA; CMCSK) subsidiary Universal’s “How to Train Your Dragon: The Hidden World” won the weekend with a franchise-best launch of $55.5M from 4,259 theaters in North America, the top opening of the year so far. Overseas, the threequel earned another $34.7M from 53 market for a foreign total of $216.9M and $274.9M globally. The movie sports an audience grade of A and a 92% Rotten Tomatoes score.

5. Altria Group’s (MO) and WellCare Health (WCG) saw positive mentions in Barron’s, while Windstream (WIN) was mentioned cautiously.

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Finisar sold for $3.2 billion

II-VI to acquire Finisar for $26 per share in cash/stock deal

Finisar sold for $3.2 billion, Stockwinners
Finisar sold for $3.2 billion, Stockwinners

II-VI (IIVI) and Finisar (FNSR) announced that they have entered into a definitive merger agreement under which II-VI will acquire Finisar in a cash and stock transaction with an equity value of approximately $3.2B.

Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, Finisar’s stockholders will receive, on a pro-rated basis, $15.60 per share in cash and 0.2218x shares of II-VI common stock, valued at $10.40 per share based on the closing price of II-VI’s common stock of $46.88 on November 8, 2018.

The transaction values Finisar at $26.00 per share, or approximately $3.2B in equity value and represents a premium of 37.7% to Finisar’s closing price on November 8, 2018. Finisar shareholders would own approximately 31% of the combined company.

The combination of II-VI and Finisar would unite two innovative, industry leaders with complementary capabilities and cultures to form a formidable industry leading photonics and compound semiconductor company capable of serving the broad set of fast growing markets of communications, consumer electronics, military, industrial processing lasers, automotive semiconductor equipment and life sciences.

Together, II-VI and Finisar will employ over 24,000 associates in 70 locations worldwide upon closing of the transaction. On a pro forma basis, the combined company had approximately $2.5B of annual revenue.

The combined broad base of talent, technology and manufacturing is expected to enhance the ability to better address near-to medium-term opportunities and accelerate revenue growth.

The combined company expects to realize $150M of run-rate cost synergies within 36 months of closing. Synergies are expected to be achieved from procurement savings, internal supply of materials and components, efficient research and development, consolidation of overlapping costs and sales and marketing efficiencies.

The transaction is expected to drive accretion in Non-GAAP earnings per share for the first full year post close of approximately 10% and more than double that thereafter.

II-VI intends to fund the cash consideration with a combination of cash on hand from the combined companies’ balance sheets and $2 billion in funded debt financing.

The transaction is expected to close in the middle of calendar year 2019, subject to approval by each company’s shareholders, antitrust regulatory approvals and other customary closing conditions.Upon closing of the transaction, Dr. Mattera will continue to serve as President and CEO of the combined company.

In addition, in connection with the closing of the transaction, three Finisar board members will be appointed to the II-VI board, which will be expanded to 11 directors.


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Electro Scientific sold for $1 billion

MKS Instruments to acquire Electro Scientific for $30.00 per share

Electro Scientific sold for $1 billion, Stockwinners
Electro Scientific sold for $1 billion, Stockwinners

MKS Instruments (MKSI) and Electro Scientific (ESIO) announced that they have entered into an agreement for MKS to acquire ESI for $30.00 per share.

The all-cash transaction is valued at approximately $1B.

The combined company is expected to have approximately $2.2B in pro forma annual revenue, based on the two companies’ calendar 2017 historical results.

The transaction is expected to be accretive to MKS’ non-GAAP net earnings and free cash flow during the first 12 months post-closing.

The combined company expects to realize $15M in annualized cost synergies within 18 to 36 months.

MKS anticipates the acquisition will further advance the MKS strategy to enhance our Surround the WorkpieceSM offerings by adding systems expertise and deep technical understanding of laser materials processing interactions.

ESI’s knowledge in printed circuit board processing systems and other capabilities will provide MKS the opportunity to accelerate the roadmaps and performance of laser, motion and photonics portfolio.

In addition, ESI brings a new platform of industrial markets enabling MKS to leverage its expertise more broadly. MKS intends to fund the transaction with a combination of available cash on hand and up to $650M in committed term loan debt financing.

On a pro forma basis, as if the transaction closed on June 30, we expect the combined company to have a strong balance sheet with combined pro forma net cash and investments of approximately $400M and total term loan debt outstanding of $1B. This would result in pro forma trailing twelve month leverage, defined as debt to Adjusted EBITDA of 1.3 times and pro forma net leverage of 0.8 times.

Actual leverage ratios will depend upon a number of factors and shall be determined at the time of the closing. The company has also obtained a commitment to upsize its asset based revolving credit facility to $100M.

The transaction has been unanimously approved by the MKS and ESI boards of directors and is subject to customary closing conditions, including regulatory approvals and approval by ESI’s shareholders, and is expected to close in Q1 of 2019.


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Integrated Device Technology sold for $6.7 billion

Renesas acquires Integrated Device for $49 per share or $6.7B

 

Integrated Device Technology sold for $6.7 billion, Stockwinners
Integrated Device Technology sold for $6.7 billion, Stockwinners

Renesas Electronics (RNECY) and Integrated Device Technology (IDTI) announced they have signed a definitive agreement under which Renesas will acquire IDT for $49.00 per share in an all-cash transaction representing an equity value of approximately $6.7B.

The stock closed yesterday down 58c to $42.08. Closing of the transaction is expected to occur in the first half of 2019, following approvals by IDT shareholders and the relevant regulatory authorities.

Renesas anticipates near- and long-term revenue growth from “expanded opportunities and access to fast-growing industries, and cost savings from a greater scale business platform to bring innovation and improvements” with an expected financial impact of approximately over $250M.

The transaction is expected to be accretive to Renesas’ non-GAAP gross margin and non-GAAP earnings per share by approximately 1.6%pts and 18%, respectively, immediately after closing.

Renesas plans to finance the transaction with cash reserves and approximately 679B yen of bank loans. Renesas does not intend to raise equity financing for this transaction. T

he companies said, “The acquisition combines two recognized leaders in embedded processors and analog mixed-signal semiconductors, each with unique strengths in delivering products to improve performance and efficiency in high-computing electronic systems. The boards of directors of both companies have unanimously approved the transaction.”


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KMG Chemicals sold for $1.6B

Cabot Microelectronics to acquire KMG Chemicals for $1.6B

KMG Chemicals sold for $1.6B, Stockwinners
KMG Chemicals sold for $1.6B, Stockwinners

Cabot Microelectronics (CCMP) and KMG Chemicals (KMG), a global provider of specialty chemicals and performance materials, have entered into a definitive agreement under which Cabot Microelectronics will acquire KMG in a cash and stock transaction with a total enterprise value of approximately $1.6B.

Under the terms of the agreement, KMG shareholders will be entitled to receive, per KMG share, $55.65 in cash and 0.2000 of a share of Cabot Microelectronics common stock, which represents an implied per share value of $79.50 based on the volume weighted average closing price of Cabot Microelectronics common stock over the 20-day trading period ended on August 13.

The transaction has been unanimously approved by the board of both companies and is expected to close near the end of calendar year 2018.

The combined company is expected to have annual revenues of approximately $1B and approximately $320M in EBITDA, including synergies, extending and strengthening Cabot Microelectronics’ position.

The transaction is subject to the satisfaction of customary closing conditions, including HSR clearance and approval by KMG shareholders.

Cabot Microelectronics expects to finance the cash portion of the transaction consideration through a combination of existing cash and additional debt supported by commitments from its key lenders.


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CA Technologies sold for $18.9 billion

Broadcom to acquire CA Technologies for $44.50 per share in cash

Stockwinners, Winning stock research since 1998
CA Technologies sold for $18.9 billion, Stockwinners

Broadcom (AVGO) and CA Technologies (CA) announced that the companies have entered into a definitive agreement under which Broadcom has agreed to acquire CA to build one of the world’s leading infrastructure technology companies.

Under the terms of the agreement, which has been approved by the boards of directors of both companies, CA’s shareholders will receive $44.50 per share in cash. This represents a premium of approximately 20% to the closing price of CA common stock on July 11, 2018, the last trading day prior to the transaction announcement, and a premium of approximately 23% to CA’s volume-weighted average price for the last 30 trading days.

The all-cash transaction represents an equity value of approximately $18.9B, and an enterprise value of approximately $18.4B.

The transaction is expected to drive Broadcom’s long-term Adjusted EBITDA margins above 55% and be immediately accretive to Broadcom’s non-GAAP EPS.

On a combined basis, Broadcom expects to have last twelve months non-GAAP revenues of approximately $23.9B and last twelve months non-GAAP Adjusted EBITDA of approximately $11.6B.

Broadcom intends to fund the transaction with cash on hand and $18B in new, fully-committed debt financing.

Broadcom expects to maintain an investment grade rating, given its strong cash flow generation and intention to rapidly de-leverage.

The transaction is subject to customary closing conditions, including the approval of CA shareholders and antitrust approvals in the U.S., the EU and Japan.

Careal Property Group AG and affiliates, who collectively own approximately 25% of the outstanding shares of CA common stock, have entered into a voting agreement to vote in favor of the transaction.

The closing of the transaction is expected to occur in the fourth calendar quarter of 2018.


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Dell to become a Public company again

Dell Technologies concludes strategic review

Dell to become a Public company again, Stockwinners
Dell to become a Public company again, Stockwinners

Dell Technologies (DVMT) announced that it has reached an agreement with its Special Committee of independent directors to exchange the outstanding Class V tracking stock for Class C common stock of Dell Technologies or an optional cash election.

Dell Technologies Class C common stock will become publicly listed on the New York Stock Exchange.

Dell Technologies will propose to exchange each share of Dell Technologies Class V tracking stock for 1.3665 shares of Dell Technologies Class C common stock, or at the holder’s election, $109 in cash, subject to the aggregate amount of cash consideration not exceeding $9B.

All of the shares of Class V tracking stock of holders who do not opt to receive cash will be converted into Class C common stock, and the Class V tracking stock will be eliminated.

The offer of $109 in cash consideration per share represents a 29% premium to the Class V share closing price prior to announcement and gives holders of Class C common stock the opportunity to participate in Dell Technologies’ future value creation.

Following the close, current Class V stockholders will own 20.8%-31.0% of Dell Technologies, depending on cash election amounts. Based on an implied value of $109 per share, Dell Technologies, excluding the Class V common stock, had a pre-transaction equity value of $48.4 billion and a pro forma fully diluted equity value of $61.1 – 70.1 billion.

VMware’s board of directors, on the recommendation of a special committee of its directors, has voted to declare an $11 billion cash dividend pro rata to all VMware stockholders contingent on satisfaction of the other conditions to the completion of the transaction. Dell Technologies’ share of such dividend will be approximately $9 billion.

Dell Technologies intends to use the dividend proceeds to finance the cash consideration paid to Class V stockholders, with remaining cash proceeds, if any, being used to fund future share repurchases or debt pay-down.

In the most recent quarter, the company generated revenue of $21.4 billion, a 19% increase year-over-year, net loss decreased 55% to $0.5 billion and the company generated $2.4 billion of adjusted EBITDA, a 33% increase year-over-year.

Over the trailing twelve-month period Dell Technologies generated $82.4 billion of revenue with a net loss of $2.3 billion and cash flow from operations of $7.7 billion.

Over the same period, Dell generated $83.5 billion of non-GAAP revenue, $4.8 billion of non-GAAP net income and $9.7 billion of adjusted EBITDA.

Dell Technologies has maintained a disciplined pace of deleveraging, having paid down $13 billion of gross debt since its merger with EMC in September 2016.

A special committee of independent members of VMware’s board of directors recommended that the VMware board declare the contingent cash dividend to support the transaction.

Dell Technologies believes the elimination of the Class V tracking stock and simplification of the VMware ownership structure is beneficial to VMware Class A public stockholders. VMware Class A public stockholders will also participate pro rata in the significant return of capital.

VMware will remain an independent publicly traded company. VMware has benefited from substantial synergies as part of the Dell Technologies family. VMware generated approximately $400 million in growth synergies in FY18 related to its affiliation with Dell Technologies, and in FY19 is on track to achieve $700 million faster than initially expected.


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