![]() ![]() The key reason for this discount could be that IIVI makes the strategic fit more challenging. With $0.8B of net debt on the books, a takeout multiple approaching 2.6x EV/Sales LTM would be vastly lower than the notable semis acquisitions announced this year. IIVI market capitalization, versus its SiC peers, makes it a more manageable entry into that business as its Enterprise Value, including a theoretical 35% acquisition premium, is still digestible at ~$7.4B. As a result of these advantages, SiC is set to displace Si across the power semis spectrum. Thus, for applications such Electric and Hybrid Vehicles (圎V), 5G Infrastructure, renewable energy, and Datacenter power supplies, only SiC-based chips can deliver the right trade-off of performance and economics. SiC-based devices operate at higher voltage levels and offer better power efficiency than that of Silicon-based (Si) chips. IIVI is a Silicon Carbide (SiC) fabricator and a wafer supplier critical to the industry. ![]() IIVI: Trading at 2.2x EV/Sales NTM, IIVI appears to be one of the cheapest names in the Semi space. On the other end of the spectrum, Cree Inc.’s (NASDAQ: CREE) recently announced divestiture could make it an attractive acquisition candidate as a pure play in an enticing market. (NASDAQ: LITE) are trading in line with historical averages (and are therefore at a significant discount to other Semi names). (NASDAQ: IIVI) and Lumentum Holdings Inc. The companies in the mid-cap space would bring in the right mix of scale and lower integration complexity, alongside the strategic impact that may fill the gaps in the product offerings at a potential acquirer.īased on the screen, two companies stood out. ![]() Narrowing the scope to the next substantial acquisition in the space, we screened for companies, who with a customary ~35% premium would cross a $5 billion enterprise value. The natural question is: where will future bids strike next? (NASDAQ: MRVL) and Inphi Corporation (NASDAQ: INPHI) (14x EV/Sales LTM) announced October 29, 2020 (NASDAQ: XLNX) (11x EV/Sales LTM) announced October 27, 2020
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