Murata nearly brings Peregrine parity with IPO price

Contact: Scott Denne

Murata Manufacturing’s $465m acquisition of Peregrine Semiconductor marks a tranquil end to the target’s two years as a public company. Peregrine went public at $14 per share two years ago this month and has agreed to sell to Murata for $12.50 per share. Though the price is a loss for its initial shareholders, it could have been far worse and the 76% premium from Peregrine’s price 30 days ago helps soften the blow.

Peregrine came through 2012 with a gain for shareholders, then a key OEM (rumored to be Apple) diversified its radio frequency component supply chain, sending the company’s stock down and contributing to stagnated revenue since the start of 2013. Peregrine is not the only semiconductor vendor that’s been hurt by an overreliance on one of the two major smartphone OEMs (Samsung and Apple). Earlier this year, Cirrus Logic snagged Wolfson Microelectronics in a $488m deal aimed at spreading out the customer base for its audio chips, and Audience, a Cirrus competitor, picked up Sensor Platforms for $41m to try to push its products beyond the smartphone market.

According to The 451 M&A KnowledgeBase, the premium for Peregrine’s stock is the highest for any chipmaker in the past 12 months, but Peregrine shareholders aren’t the only ones to get bailed out of a poor-performing semiconductor stock with a hefty premium. Avago Technologies’ $6.6bn purchase of LSI at 36% brought that company’s stock up to levels it hadn’t seen since 2006, and the 75% premium that M/A-COM Technology handed to Mindspeed Technologies shareholders helped level off a 36% drop in the target’s stock in 2013.

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