Silicon Motion Technology Corporation (NASDAQ: SIMO) is engaged as a global supply leader for NAND flash controllers for solid state storage devices. Shares of the semiconductor company are rallying 19% through early trading on Thursday, May 5, 2022. Over the past three months, Silicon Motion Technology has seen average daily volume of 649,520 shares. However, volume of 2.83 million shares or dollar volume of around $271.68 million, has already exchanged hands through early trading.
Shares of Silicon Motion Technology are gaining after the company announced it has entered into a definitive agreement to be acquired by MaxLinear, Inc. (NASDAQ: MXL), a provider of radio frequency (RF), analog, and mixed-signal integrated circuits for use in broadband. The transaction would create a combined company with over $2 billion in revenue and an enterprise value of around $8 billion.
The merger would create a top-ten fabless semiconductor supplier with a total addressable market opportunity of around $15 billion. Synergistic technologies would help to accelerate infrastructure growth across computing, networking, and storage domains.
Under the terms of the agreement, Silicon Motion Technology shareholders would receive $93.54 in cash and 0.388 shares of MaxLinear common stock per ADS. This gives a total per ADS consideration of $114.34, which represents a premium of 48% compared to Silicon’s close on April 22, 2022. Overall, the acquisition transaction has a total value of $3.8 billion.
“Today’s announcement celebrates the combination of two companies that have driven significant innovation in their respective industries for over a decade,” said Kishore Seendripu, Ph.D., Chairman and CEO of MaxLinear. “The enhanced scale of the combined organization creates a new significant $2B+ player in the semiconductor industry with compelling positions across a diversified set of end-markets. MaxLinear has demonstrated a strong track record of integration success and looks for this combination to create robust growth, impressive operating margins and significant cash flows.”
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