Saturday, November 14, 2015

Seeking Alpha: Is Microsemi Courting The Winner's Curse?

I've written pretty regularly on Microsemi (NASDAQ:MSCC) for Seeking Alpha, and this has long been a semiconductor stock that I've liked (and own in my own portfolio). Along the way, I've often mentioned that additional M&A felt like a "when, not if" question given Microsemi's past success in using deals to broaden its product, market, and technology exposures. I wasn't expecting something quite as dramatic as the company's bid for PMC-Sierra (NASDAQ:PMCS), but this is a deal that otherwise fits Microsemi's pattern of diversification, cost synergy, and market expansion.

I believe that PMC-Sierra can be a good deal for Microsemi, but I openly acknowledge that Skyworks (NASDAQ:SWKS) will prevail in the end if that company decides that it simply cannot afford to let PMC-Sierra slip away. I also believe, though, that Microsemi has more to gain in terms of synergies and market diversification. Last and not least, while Skyworks' all-cash deal is definitely a lower-risk proposal for PMC-Sierra shareholders, Microsemi's offer appears to me to give PMC-Sierra shareholders more long-term upside.

Continue here:
Is Microsemi Courting The Winner's Curse?

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