AATI Advanced Analogic Technologies, Inc. (MM)

Skyworks Solutions, Inc. (SWKS) recently announced that it has amended its previously announced merger agreement with Advanced Analogic Technologies, Inc. (AATI).

Advanced Analogic Technologies Inc. (AATI) provides advanced power management semiconductor solutions which support automotive, broadband, cellular infrastructure, energy management, industrial, medical, military and mobile handset applications.

The merger was announced in May 2011. On May 26, 2011, Skyworks announced that it will acquire Advanced Analogic Technologies at a price of $6.13 per share. The total offer price consists of $3.68 per share in cash and .08725 of a share of Skyworks common stock for each outstanding share of Advanced Analogic Technologies’ common stock.

Under the amended agreement, Skyworks will acquire all of the outstanding shares of Analogic Technologies for $5.80 per share in cash through a tender offer that Skyworks intends to commence within seven business days.

Both the companies expect the transaction to be completed in January 2012. Skyworks expects the transaction to be accretive to its bottom-line in fiscal 2012 and will provide detailed information on the same during the first quarter earnings call in January 2012. The company will finance the acquisition with cash on hand.

This acquisition expands Skyworks’ product portfolio with highly complementary analog semiconductor products including battery chargers, DC/DC converters, voltage regulators and LED drivers. Skyworks aims to expand its smart phone, tablet and set-top box market with this merger and also expects to improve infrastructure facilities apart from expanding its vertical markets.

We have a Neutral recommendation on Skyworks Solutions. However, Skyworks has a Zacks #4 Rank, which implies a Sell rating in the short-run.

 
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