Macom to buy Applied Micro Circuits for $8.36 per share
Staff Writer |
Macom Technology Solutions Holdings as entered into a definitive agreement to acquire Applied Micro Circuits Corporation for approximately $8.36 per share.
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The prics is consisting of $3.25 in cash and 0.1089 Macom shares per share of AppliedMicro. This price for each share of AppliedMicro represented a 15.4% premium over the company's closing price of $7.25 on Friday, November 18th.
Macom intends to divest the well-positioned but non-strategic Compute business within the first 100 days of closing.
Transaction highlights:
Transaction valued at approximately $770 million for AppliedMicro's approximately $165 million in TTM revenue (including the Compute business) and $82 million of cash and short-term investments at September 30, 2016
Macom and AppliedMicro's pro forma combined TTM revenue was approximately $709 million including AppliedMicro's Compute business, or approximately $644 million excluding the Compute business
AppliedMicro's Connectivity business is highly complementary to Macom's product portfolio, through the addition of market-leading OTN framers, MACsec Ethernet networking components and the industry's leading single-lambda PAM4 platform
Transaction to accelerate Macom's significant growth in optical technologies for Cloud Service Providers and Enterprise Network customers serving the high-growth, high-margin Data Center market
AppliedMicro's leadership PAM4 solutions based on FinFET technology and custom engagements with top-tier Data Center and service provider customers is expected to strengthen Macom's competitive position with those customers
Macom expects to improve the profitability of AppliedMicro by divesting the Compute business and by delivering on substantial revenue and cost synergies
Excluding the Compute business, Macom expects this transaction to be accretive to its non-GAAP gross margin, non-GAAP operating margin and non-GAAP EPS, in Macom's fiscal year ending September, 2017
Macom to benefit from over $600 million of tax net operating loss carry forwards. ■