Cypress Semiconductor Corporation
) recently announced that it has finally reached an agreement to
Ramtron International Corp.
) for $3.10 per share in cash. The deal is expected to close by the
end of the calendar year.
This was Cypress' fourth attempt in more than one year to take
over its peer Ramtron International. The deal represents a premium
of 71% to Ramtron's closing price of $1.81 per share on June 11.
The offer translates into a purchase price of about $109.8 million.
The first public offer of $2.48 per share was made in June,
which was rejected stating that it was inadequate and not in the
best interest of Ramtron's shareholders.
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 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 41% of revenue in the second quarter and was up
1.3% sequentially. The sequential increase came on the back of
strong demand in the static random access memory (SRAM)
The impact of the deal on Cypress' financials is unknown but it
will definitely bring synergies on the sales side.
Cypress is 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
Cypressoperates 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
CYPRESS SEMICON (CY): Free Stock Analysis
RAMTRON INTL CP (RMTR): Free Stock Analysis
SYNAPTICS INC (SYNA): Free Stock Analysis
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