Cypress Semiconductor Corporation
) announced that it has extended the deadline for the acceptance of
its tender offer to buy all of
Ramtron International Corp.'s
) outstanding stock for $2.88 per share by two weeks.
The initial offer of $2.68 per share was raised to $2.88 per
share last month, representing a purchase price of about $109
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 September 11,
which has now been extended to September 25.
However, all other terms and conditions of the offer remain
unchanged. This is the fourth time that Cypress has extended the
deadline for acceptance of its 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 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) 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
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) business.
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
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
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