Cypress Is Considering a Sale After Getting Takeover Interest
Cypress Is Considering a Sale After Getting Takeover Interest
(Bloomberg) -- Cypress Semiconductor Corp. is exploring strategic options including a potential sale after receiving takeover interest, according to people familiar with the matter.
The San Jose, California-based company is working with advisers, said the people, who asked to not be identified because the matter isn’t public. No final decision has been made and it could opt to remain independent, they said.
A representative for Cypress Semi didn’t respond to requests for comment left outside of normal business hours.
Cypress Semi rose 11% to $17.14 at 11:45 a.m. in New York trading Wednesday, giving the company a market value of about $6.4 billion. The stock rose as high 14.6% in its largest single-day gain since 2014, according to data compiled by Bloomberg.
Industry Consolidation
The semiconductor industry has been reshaped over the past five years as companies combine to gain scale while fighting rising costs and shrinking customer bases. NXP Semiconductors NV announced a $1.76 billion deal Wednesday for Marvell Technology Group Ltd.’s Wi-Fi connectivity business while Nvidia Corp. agreed to buy chipmaker Mellanox Technologies Ltd. for $6.9 billion in March
Cypress Semi designs and manufactures flash memory chips and microcontrollers, or chips used for powering small electronic devices. In 2015, the company merged with Spansion Inc. in an all-stock deal worth about $4 billion.
Cypress Semi reached a settlement in 2017 with founder T.J. Rodgers, who waged a proxy fight after being ousted as chief executive officer.
The company has been trying to recast itself as a provider of chips for use in vehicles and the growing market for so-called internet of things, the push by the electronics industry to connect devices. It’s told investors it expects its automotive business to grow 8% to 10% annually over the next five and its IoT unit to expand at as much 14% in that period.
Annual revenue, helped by an acquisition, has more than doubled in five years to $2.5 billion in 2018. Analysts are predicting that sales growth will disappear this year, forecasting a contraction of about 11%, according to the average of analysts’ estimates from data compiled by Bloomberg.
--With assistance from Ruth David and Ian King.
To contact the reporters on this story: Liana Baker in New York at lbaker75@bloomberg.net;Ed Hammond in New York at ehammond12@bloomberg.net
To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Matthew Monks
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