Cypress Semiconductor Corporation
) recently announced that it has completed its acquisition of
Colorado Springs-based Ramtron International Corp. for a total of
$109.8 million or $3.10 per share in cash.
The Gazette of Colorado Springs stated that Ramtron's CEO Eric
Balzer and three other top executives left the company. Almost
140 employees were laid off following the takeover.
Post acquisition, Cypress plans to consolidate two of
Ramtron's Colorado Springs locations into one and make that
facility the headquarters for the company's non-volatile memory
Cypresshad been pursuing its rival semiconductor company
Ramtron for months. Cypress made its first public offer of $2.48
per share in June, revised it to $2.68 in July and $2.88 in
August. Each offer was rejected, on grounds that it was
inadequate, until Cypress made an offer of $3.10 per share in
September. The final deal represents a premium of 71% to
Ramtron's closing price of $1.81 per share on June 11.
Ramtron International is a fabless semiconductor company with
about 34.0 million shares outstanding. It supplies ferroelectric
random access memories and has
Texas Instruments Inc.
) and Toshiba Corp. as manufacturing partners.
We believe the deal makes sense for Cypress for a number of
reasons. First, Ramtron is a fabless company and would fit very
well into Cypress' low capex manufacturing strategy. Being a
fabless company, Ramtron relies on partners for manufacturing,
assembly and testing of products that offer superior technology
and services at competitive prices.
Second, Ramtron's ferroelectric-RAM (F-RAM) will likely
supplement Cypress' Memory Products Division, which includes
Asynchronous SRAMs, Synchronous SRAMs and nvSRAMs, and provide a
longer-term roadmap for its non-volatile memory market. Ramtron's
F-RAM enables read-writes with very little delay, low power
consumption, and high endurance with limited memory loss.
The F-RAM is also competitive with some of the newer
technologies such as Phase-change-RAM. The Memory Products
Division segment generated 43.5% of revenue in the third quarter
and was up 6.4% sequentially. The sequential increase came on the
back of strong demand in the static random access memory (SRAM)
business and certain one-time benefits related to patent sales
and increases in Sync business.
The impact of the deal on Cypress' financials is unknown but
it will definitely bring synergies on the sales side.
Cypressis a semiconductor company offering high-performance,
mixed signal, programmable solutions. In the third quarter,
Cypress reported earnings of 12 cents, beating the Zacks
Consensus Estimate of 5 cents. The improved gross margins and
tight operating expense control contributed to the upside in
Currently, Cypress has a Zacks #3 Rank, implying a short-term
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