Tuesday, February 9, 2016

Seeking Alpha: Microsemi Bigger And Better, But Has Work To Do

Microsemi (NASDAQ:MSCC) won the bidding competition for PMC-Sierra in 2015 and closed the deal early in January. Now the hard work really starts. While PMC-Sierra brings attractive diversification, growth potential, and expense synergies, it falls to Microsemi management to prove that they can not only successfully integrate the deal (something they have a lot of experience with), but fully leverage the growth opportunities that PMC-Sierra was building towards before the deal.

I believe that Microsemi will get the job done and emerge a better, stronger, faster-growing company after this deal. This deal pushes my modeled fair value on Microsemi into the low $40's, and I think investors will pleased to see the company leverage growth opportunities in defense, aerospace, and communications while many chip companies try to navigate through a weaker smartphone and industrial environment.

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Microsemi Bigger And Better, But Has Work To Do

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