M/A-Com Closes Mindspeed Processor Sale - Analyst Blog

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M/A-Com Technology Solutions Holdings, Inc. ( MTSI ), a leading supplier of analog semiconductor solutions, announced that its subsidiary, Mindspeed Technologies, Inc., has successfully completed the sale of its CPE communication processor division to Freescale Semiconductor, Ltd. ( FSL ). The terms of the deal were kept under wraps.

The Deal

The divestment includes a series of multicore, ARM-based embedded processors and related software. While the Comcerto 100, 1000 and 2000 product ranges of multicore embedded processors formed a part of the deal, M/A-Com retained the related Comcerto VoIP processor business as a long-term investment.

The transaction will augment Freescale's footing in multicore processors, thereby broadening the company's extensive product portfolio and presenting renewed revenue growth opportunities. The pact will enable Freescale to advance its domain into gateways and network-attached storage, at a time of technological breakthroughs in the Internet of Things, cloud technology and home automation and security.

From M/A-Com's viewpoint, the transaction furthers its strategy of streamlining its operations in order to enhance focus on its core markets.

M/A-Com's Strategy

M/A-Com had acquired Mindspeed Technologies last November; seeking to leverage the latter's high-growth, high-margin HPA (high performance analog) division as well as its cash-generating VoIP business. Further, Mindspeed's silicon germanium-based capabilities provided M/A-Com with the expertise to develop new applications and additional system content in its core RF and microwave applications.

Mindspeed's integration into M/A-Com's operations is expected to generate significant financial synergies as it leverages the former's established sales channel in Asia Pacific, thus expanding its global footprint.

Part of M/A-Com's integration strategy was to divest or restructure underperforming businesses, specifically Mindspeed's wireless and communications processor units. M/A-Com completed the sale of the wireless infrastructure assets to Intel Corp. ( INTC ) in Feb 2014.

The strategic divesture of the communications processor units is also in alignment with M/A-Com's strategy to focus on its core competencies, including the high performance analog, RF, microwave and millimeter wave markets.

Moving Forward

M/A-Com, a leading player in the semiconductor industry, provides analog semiconductor solutions for use in wireless and wireline applications across the RF, microwave and millimeter wave spectrum.

M/A-Com seems poised to become a worldwide leader in HPA solutions for high speed networking and enterprise applications following the integration of Mindspeed.

M/A-Com presently sports a Zacks Rank #3 (Hold). A better-ranked stock in the industry that look promising is Montage Technology Group Ltd. ( MONT ), holding a Zacks Rank #1 (Strong Buy).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: FSL , INTC , MONT , MTSI

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