Cypress Semiconductor Corporation
) announced that it has extended the time for acceptance of its
tender offer to buy all of
Ramtron International Corp.
) outstanding stock for $2.68 per share.
The initial offer of $2.48 per share was raised to $2.68 per
share in July, representing a purchase price of about $95 million.
The offer was declined by Ramtron stating that it was inadequate
and not in the best interest of its shareholders. The deadline for
the offer was scheduled to expire on August 17, which has now been
extended to August 24.
However, all other terms and conditions of the offer remain
unchanged. This is the third time that Cypress has extended the
deadline on their offer to buy Ramtron.
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. In the second
quarter of 2012, Ramtron reported revenue of $14.2 million with a
net profit of $69,000.
We believe the deal could make 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 has the flexibility to move the
manufacturing, assembly and testing of products to vendors that
offer superior technology and services at competitive prices. It
also frees up resources for research and development that would
otherwise have been locked up in capital assets.
Also, Ramtron's ferroelectric-RAM (F-RAM) would 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
fast read-writes with minimum delay, low power consumption, and
high endurance with limited memory loss. The F-RAM is also
competitive with newer technologies such as Phase-change-RAM.
If the deal materializes, it would definitely bring synergies on
the sales side of Cypress.
Cypressis a semiconductor company offering high-performance,
mixed signal, programmable solutions. In the second quarter,
Cypress reported earnings of 5 cents, beating the Zacks Consensus
Estimate of 3 cents. Higher touch sales, improved gross margins and
tight operating expense control contributed to the upside in
Recently, the company also announced that its board of directors
has approved a quarterly cash dividend of 11 cents per share
payable on October 18, 2012. The regular dividend payments are a
good way of encouraging investor confidence as it returns
Cypress operates in a highly competitive market. In the
touchscreen market, the company competes with
Currently, Cypress has a Zacks #3 Rank, implying a short-term
ATMEL CORP (ATML): Free Stock Analysis Report
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