Back to Back Buys for Skyworks - Analyst Blog

Skyworks Solutions Inc. (SWKS) announced that it will acquire an analog semiconductor company Advanced Analogic Technologies Incorporated (AATI) for $6.13 per share.

Headquartered in Silicon Valley, Advanced Analogicis a provider of power management semiconductors for mobile consumer electronic devices, such as wireless handsets, notebook and tablet computers, smartphones, digital cameras, and digital audio players.

The offer price of $6.13 per share is at a 52% premium to Advanced Analogic 30-day trailing average. Under the terms of the acquisition, Skyworks would pay $3.68 a share in cash and the balance in a ratio of 0.08725 shares of Skyworks' common stock for each outstanding share of Advanced Analogic.

The company stated that analog semiconductor products of Advanced Analogic are complementary to Skyworks' portfolio, and consequently, enable expansion of the company's portfolio and entry into new vertical markets. Furthermore, Skyworks is expected to capitalize on its strong smartphone, tablet set-top-box and infrastructure positions.

Gartner, a leading independent market research firm, estimates that the total available market for the analog power management should grow to $12.1 billion by 2014 from $9.9 billion in 2010.

The succcessful conclusion of the transaction depends on the  approval of Advanced Analogic's shareholders and is expected to be accretive to Skyworks non-GAAP earnings.

Skyworks also announced that it will acquire fabless semiconductor company SiGe Semiconductor for $210 million. In addition, the company agreed to pay $65 million on the achievement of certain milestones. The transaction is expected to close in June, 2011.

Management expects that Skyworks will enhance its wireless networking product portfolio on the back of SiGe's innovative short range, silicon-based products. This acquisition will also expand the company's addressable content opportunity for smart phones, tablets, gaming consoles, notebook PCs and home automation systems.

Moreover, the company expects to realize significant operational and cost synergies from the acquisition, which will lead to a growth in non-GAAP earnings as well as shareholders wealth.

Skyworks Solutions designs, manufactures, and markets a broad range of high performance analog and mixed signal semiconductors that enable wireless connectivity. The company directly competes with Anadigics, Inc. (ANAD), RF Micro Devices Inc. (RFMD) and TriQuint Semiconductor, Inc. (TQNT).