Contact: Thejeswi Venkatesh
Chipmaker Cypress Semiconductor has finally snagged Ramtron. After more than a year of chasing its smaller rival, Cypress has announced a definitive agreement to acquire Ramtron for $110m. It is Cypress’ first acquisition in four years, and its largest ever. The deal comes after Ramtron’s board publicly rejected two previous increased offers.
While Ramtron’s shareholders were surely at the edge of their seats while the saga played out, they will be happy with the outcome. The final offer, which values Ramtron at 1.6 times trailing sales, is a handsome 25% more than Cypress’ initial public bid of $87.6m. And it was about 70% higher than where Ramtron shares were trading on their own before Cypress’ acquisition offer.
The outcome also reminds us of fellow chip designer Microsemi’s purchase of Zarlink in September 2011. After six months of courting and two rejections, Microsemi finally bought Zarlink for $525m. That represented a 15% premium over the initial bid.