Markets
AXE

Mentor Graphics & Siemens Deal Clears Regulatory Hurdle

A generic image of a newspaper with Stock Market as the Headline.
Credit: Shutterstock photo

Reportedly, the pending acquisition of Mentor Graphics CorporationMENT by Siemens announced in Nov 2016 for $4.5 billion has cleared a regulatory hurdle.

Mentor Graphics received a notice on Dec 22 from the Federal Trade Commission stating that the remaining waiting period associated with one of the antitrust regulations has been waived by the authorities. However, the meeting date for the same has not been decided yet.

The deal, which is expected to be completed by the second quarter of 2017, now requires approval from Mentor Graphics shareholders.

MENTOR GRAPHICS Price and Consensus

MENTOR GRAPHICS Price and Consensus | MENTOR GRAPHICS Quote

Acquisition Details

Siemens has agreed to pay $37.25 for every share of Mentor which generated revenues to the tune of $1.18 billion last year.

The acquisition is anticipated to bolster Siemens' earnings within three years of completion of the deal.

Following the completion of the acquisition, Mentor Graphics will become a part of the Product Lifecycle Management software wing of Siemens that comes under the Digital Factory Division. Additionally, Mentor Graphics' workforce of 1000 local employees and 5700 employees worldwide will be absorbed by Siemens.

As per an IDC report, worldwide spending on EDA is estimated to grow at a CAGR of 9.4% over the period of 2014 - 2019. Hence, this acquisition augurs well for Siemens and is likely to have a positive impact on the company's top line going ahead.

Stock Performance Overview

Shares of Mentor Graphics have outperformed the broader Zacks Computer Integrated Systems industry over the last six months. While the industry generated a positive return of 17.0%, the stock returned a phenomenal 76.9%.

Zacks Rank and Key Picks

At present, Mentor Graphics carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology space are Anixter International Inc. AXE , Amkor Technology, Inc. AMKR and Broadcom Limited AVGO , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Notably, the consensus estimate for Anixter's current year has remained stable at $4.84 over the last 60 days.

Similarly, the consensus estimate for Amkor's current year has improved to 53 cents from 44 cents over the last 60 days.

Last but not the least, the consensus estimate for Broadcom's current year has improved to $12.10 from $11.40 over the last 30 days.

Zacks' Top 10 Stocks for 2017

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?

Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

MENTOR GRAPHICS (MENT): Free Stock Analysis Report

BROADCOM LTD (AVGO): Free Stock Analysis Report

AMKOR TECH INC (AMKR): Free Stock Analysis Report

ANIXTER INTL (AXE): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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


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

In This Story

AXE AMKR AVGO

Other Topics

Stocks

Latest Markets Videos