Microsemi Corporation (MSCC) Wins Takover Bid for PMC-Sierra

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Microsemi Corporation (NASDAQ:MSCC) shares are down today following the announcement that they’ve won a $2.5 billion takeover bid for the semiconductor company PMC-Sierra.

“This acquisition will provide Microsemi with a leading position in high performance and scalable storage solutions, while also adding a complementary portfolio of high-value communications products,” Microsemi CEO James Peterson said. “As we integrate the team and drive profitability, our combined company will benefit from increased scale, industry-leading margins, diversified market exposure, consolidated infrastructure and substantial cost savings.”

The acquisition is certainly a large one for the company who will be paying a premium of 77.4% over the September 30th closing price of PMC-Sierra’s shares. The stock is down 7.77% or $2.81 after the news, hitting $33.4 per share. About 1.48M shares traded hands or 87.80% up from the average. MSCC has risen 0.64% since April 22, 2015 and is uptrending. It has outperformed by 1.65% the S&P500.

Out of 6 analysts covering Microsemi (NASDAQ:MSCC), 5 rate it “Buy”, 0 “Sell”, while 1 “Hold”. This means 83% are positive. $45 is the highest target while $37 is the lowest. The $44 average target is 31.74% above today’s ($33.4) stock price. Microsemi was the topic in 9 analyst reports since August 3, 2015 according to StockzIntelligence Inc. RBC Capital Markets maintained the stock on November 6 with “Outperform” rating. Mizuho initiated the shares of MSCC in a report on October 14 with “Buy” rating. Finally, Sterne Agee CRT initiated the stock with “Buy” rating in a September 9 report.

The institutional sentiment increased to 1.39 in Q2 2015. Its up 0.18, from 1.21 in 2015Q1. The ratio is positive, as 19 funds sold all Microsemi Corporation shares owned while 80 reduced positions. 41 funds bought stakes while 97 increased positions. They now own 92.60 million shares or 1.63% more from 91.11 million shares in 2015Q1.

Messner & Smith Theme Value Investment Management Ltd Ca holds 3.25% of its portfolio in Microsemi Corporation for 67,665 shares. Goldentree Asset Management Lp owns 343,487 shares or 2.68% of their US portfolio. Moreover, 1492 Capital Management Llc has 2.67% invested in the company for 120,879 shares. The Illinois-based Channing Capital Management Llc has invested 2.14% in the stock. Whale Rock Capital Management Llc, a Massachusetts-based fund reported 489,694 shares.

Since March 11, 2015, the stock had 0 insider purchases, and 25 selling transactions for $15.09 million net activity. Anderson Thomas Robert sold 1,000 shares worth $36,303. Litchfield Steven G sold 8,756 shares worth $301,684. Pickle Paul H sold 12,884 shares worth $443,482. Hohener John W sold 10,140 shares worth $348,725. The insider Goren David sold 7,619 shares worth $262,869.

Microsemi Corporation is a designer, maker and marketer of high-performance analog and mixed-signal semiconductor solutions. The company has a market cap of $3.26 billion. Microsemi’s products include high-performance and radiation-hardened analog mixed-signal integrated circuits (ICs), field programmable gate arrays (FPGAs), system on chip solutions (SoCs) and application-specific integrated circuits (ASICs); power management products; timing and synchronization devices and precise time solutions; voice processing devices; radio frequency (RF) solutions; discrete components; security technologies and scalable anti-tamper products; Power-over-Ethernet (PoE) ICs and midspans. It has 37.85 P/E ratio. The principal end markets that its serves include aerospace, communications, defense and security, and industrial.

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