Microsemi Corporation (NASDAQ:MSCC) recently announced its plan to acquire Vitesse Semiconductor (NASDAQ:VTSS) in an all-cash transaction worth approximately $389 million. A definitive agreement has already been signed in this regard.
Highlights of the Agreement
The announcement of the agreement was made yesterday, in which, it was said that the offering shall be $5.28 per share. On completion of the agreement, Microsemi will be able to swell its position in the communications and semiconductor market.
The deal is planned to be executed finally in the financial quarter that will end on June 28, 2015. In the meanwhile, Vitesse will try and strike for a better offer until April 2015.
Benefit of the deal to Microsemi: An analysis
In his statement, the CEO & Chairman of Microsemi Corporation (NASDAQ:MSCC), James J. Peterson said that Vitesse has a comprehensive and complementary suite of technology. This shall help their company in accelerating the business while also enhancing the product portfolio. With its commitment and target to develop Microsemi in light of full-fledged communications semiconductor firm, this acquisition shall be a fruitful transaction.
The assortment of products in its list will enable Microsemi to have differentiated portfolio in terms of technology in this competitive market. It is worthwhile to note that Vitesse has the products which allow fastest growth for network infrastructure in markets such as industrial IoT networking and access to enterprise cloud.
It is expected that Microsemi will try to derive benefit by leveraging the Ethernet technology of Vitesse. This shall enable it to reinforce its position in the communications market. Also, the adoption of IoT strategy in a better way will allow it to extract advantage from the Internet of Things network, which forms a part of Vitesse’s diverse portfolio.
After the deal is sealed, Microsemi Corporation (NASDAQ:MSCC) is expecting better earnings in the first of the entire fiscal. The transaction, it seems will give targeted synergies, in a positive form to Microsemi.