Intersil Corporation (ISIL) Maintains Neutral Rating
March 23, 2010 9:25 AM
Credit Suisse has released an update on Intersil Corporation (NASDAQ: ISIL). The company has announced that it intends to acquire Techwell, Inc. (NASDAQ: TWLL) for $18.50 per share, a premium of 49% on Techwell’s closing price on Friday.
Intersil should see an additional $85-$90 million in annual revenue from the acquisition of Techwell. Credit Suisse believes that the acquisition is consistent with Intersil’s growth strategy and will increase the company’s industrial revenue from 21% to 29% of the total.
Credit Suisse has maintained its Neutral rating for Intersil Corporation as it believes that the higher R&D burden provides near-term headwinds to the bottom line. The price target for Intersil stock has been maintained at $14, which represents a multiple of 14x the 2010 EPS estimate of $1.01.
