Almost a month after announcing a buyout offer by privately-owned RF chipmaker GaAs Labs, semiconductor maker Anadigics, Inc. ANAD said that it has received acquisition proposals that might lead to a buyout offer with better terms than what GaAs Labs offered.
Anadigics recently announced that it has inked a definitive merger agreement with GaAs Labs — an investment firm specializing in communications, semiconductor and related markets. GaAs Labs offered to acquire Anadigics for 35 cents per share, representing a premium of 38.2% based on the closing price as on Nov 11, 2015. However, the offer price is roughly 56% below where Anadigics started the year.
Post acquisition, Anadigics will operate as a wholly-owned subsidiary of GaAs Labs.
The deal will likely provide an ideal platform for Anadigics to accelerate innovation and product development, thus fuelling top-line growth in key target markets of CATV, small cell, WiFi and optical. Anadigics will be able to leverage GaAs Labs’ extensive industry knowledge and proven track record, and thus offer its customers a broader portfolio of innovative product offerings. On the other hand, with Anadigics on board, GaAs Labs is expected to tap new markets and drive its growth objective.
Anadigics' third-quarter numbers and recent operating performance help explain the rationale behind the company's decision to sell. In the last reported quarter, revenues fell 36% year over year, and the company reported a loss of $5.7 million. In fact, Anadigics has been incurring losses over the last few quarters and its revenues have steadily deteriorated.
Per the buyout offer by GaAs Labs, Anadigics got a 25-day go-shop period during which it could solicit superior proposals. Having received acquisition proposals in that period, Anadigics has determined that it will continue to negotiate with the concerned parties in line with the terms of GaAs Labs Merger Agreement.
The struggling RF chipmaker restated that it has the right to terminate the GaAs Labs deal in case it receives a superior buyout offer, subject to the terms of the GaAs Labs Merger Agreement.
Anadigics presently has a Zacks Rank #2 (Buy). Other players in the industry that are worth a look now include Silicon Motion Technology Corp. SIMO, Integrated Device Technology, Inc. IDTI and Mellanox Technologies, Ltd. MLNX, each sporting a Zacks Rank #1 (Strong Buy).
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