Contact: Thejeswi Venkatesh
After staying out of the M&A market for four years, Cypress Semiconductor stepped back in earlier this week with an $87.6m unsolicited cash bid for ferroelectric RAM designer Ramtron International. However, this isn’t the first time that Cypress has tried to acquire its smaller rival. Cypress revealed that it tried to buy Ramtron’s equity last year for approximately the same amount, an offer the company flatly declined.
Cypress’ bear hug comes at a time when Ramtron has struggled to increase its business under existing management. Last year, the company generated sales of $66m, virtually unchanged from 2008. For its part, Cypress has seen its revenue increase at a healthy rate, going from $765m in 2008 to $995m in 2011. Cypress, which has asked Ramtron to respond to its offer by next week, has engaged Greenhill & Co as financial adviser while Needham & Co will advise Ramtron.
On its return to M&A, Cypress is focusing on a business it knows well: memory chips. The company has a blemished history in trying to expand its product offering through inorganic means. For instance, Cypress divested SMal Camera Technologies in 2007 for $11.4m, approximately one-quarter the $42.5m it paid for the company just two years earlier. Similarly, Cypress acquired FillFactory for $100m in the summer of 2004 but sold the division to ON Semiconductor in early 2011 for a mere $31.4m.
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Source: The 451 M&A KnowledgeBase