Skyworks Solutions Inc., Woburn MA, maker of high performance analog semiconductors has reached a definitive agreement to acquire PMC-Sierra Inc., Sunnyvale CA, a semiconductor and software solutions leader in storage, optical and mobile networks.
The deal is valued at $10.50 per share in an all-cash transaction worth approximately $2-billion. The move solidifies Skyworks’ position as a highly diversified analog, RF and mixed signal semiconductor leader by significantly expanding its product portfolio, customer base and end market applications.
Upon completion of the acquisition, Skyworks expects annual revenues of more than $4-billion with gross margin in the 55% range and operating margin exceeding 40%.
“With our acquisition of PMC, Skyworks will be uniquely positioned to capitalize on the explosive demand for high performance solutions that seamlessly connect, transport and store big data,” says David Aldrich, chairman and chief executive officer of Skyworks. “Specifically, we plan to leverage PMC’s innovative storage systems, flash controllers, optical switches and network infrastructure solutions to expand our engagements with some of the world’s leading OEMs and ODMs as well as emerging hyperscale data center customers. At a higher level, this complementary yet highly synergistic acquisition is consistent with our stated strategy of diversifying into adjacent vertical markets while leveraging our system-level expertise and global scale. PMC enables us to substantially expand our serviceable market within some of the fastest growing segments in technology including cloud storage and optical networking.”
“The PMC team is excited to join forces with Skyworks to realize our vision of transforming the broader communications landscape through unparalleled product breadth and operational scale,” says Greg Lang, president and CEO of PMC. “Given Skyworks’ deep global sales channels and leadership applications support, underpinned by a world class supply chain, we could not have found a better partner. Together, we plan to develop a wider range of leading-edge solutions for our customers, target new growth vectors and enable some of the most exciting networking and storage platforms in the world, while delivering immediate value for our shareholders.”