Leading analog semiconductor manufacturer
Avago Technologies Limited
) recently inked a definitive agreement with Intel Corporation (
) to divest one of its operating units and related assets for $650
million in cash. The transaction is expected to augment Avago's
liquidity to capitalize on potential future acquisition
Avago will sell the Axxia Networking Business of LSI Corporation,
which it acquired in May this year, to Intel. Avago acquired LSI to
diversify its existing business line from wired infrastructure,
wireless and industrial businesses into the storage chip market.
The strategic move was aimed to augment its revenues, as the
industry braced for more consolidation amid a challenging
Employing about 650 people, Axxia Networking Business focuses on
System on Chip (SoC) technology for mobile network infrastructure.
The unit generated $113 million in revenues in 2013. With the deal,
Intel is likely to gain a compelling product line to bolster its
presence in the wireless service-equipment manufacturing business.
The transaction is expected to close by the fourth quarter of
calendar 2014, subject to mandatory closing conditions and
regulatory approvals. The deal, however, has received the go-ahead
from the respective management teams.
With expertise in compound semiconductor design and processing,
Avago is a premier designer, developer and global supplier of a
broad range of analog, mixed signal and optoelectronics components
and subsystems. The company boasts over 4,200 patents serving three
primary target market segments: wireless communications, wired
infrastructure, and industrial and other.
Avago presently has a Zacks Rank #3 (Hold). Other stocks that are
worth considering in the industry include Advanced Semiconductor
Engineering Inc. (
) and Amkor Technology, Inc. (
), each carrying a Zack Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
INTEL CORP (INTC): Free Stock Analysis Report
AVAGO TECHNOLOG (AVGO): Free Stock Analysis
AMKOR TECH INC (AMKR): Get Free Report
ADV SEMICON ADR (ASX): Free Stock Analysis
To read this article on Zacks.com click here.