The renaissance in the world of semiconductor stocks is clearly upon us. After years of struggle and being beguiled by profit margins and the idiosyncracies of Apple, investors have ceased to care and have bid up the sector to fantastic levels. Analog devices is taking advantage of suchness, and has decided to acquire a lowly competitor for the pedestrian sum of $14.8b.
The co’s announced that they have entered into a definitive agreement under which Analog Devices will acquire Linear Technology in a cash and stock transaction that values the combined enterprise at approximately $30 billion. Upon completion of the acquisition, Analog Devices will be the premier global analog technology company with approximately $5 billion in anticipated annual revenues.
- Under the terms of the agreement, Linear Technology shareholders will receive $46.00 per share in cash and 0.2321 of a share of Analog Devices common stock for each share of Linear Technology common stock they hold at the closing of the transaction. The transaction values Linear Technology at approximately $60.00 per share, representing an equity value for Linear Technology of approximately $14.8 billion
- The transaction is expected to be immediately accretive to Analog Devices’ non-GAAP EPS and free cash flow. Analog Devices expects to achieve $150 million of annualized run-rate cost synergies within 18 months post transaction close
- Closing of the transaction is expected by the end of the first half of calendar year 2017
YTD, semis have been, by far, the best performing stocks in the tech sector.
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