Conexant Systems (Nasdaq: CNXT) ($37.06)
No Rating
Arun Veerappan, Communication Components/Semiconductor Devices
"On September 13, Conexant announced its intent to separate into two separate organizations by initially spinning off its Internet infrastructure business as an independent, publicly traded company," said Veerappan. "The Internet infrastructure business, in our opinion, represents Conexant's fastest-growing business, focused solely on the rapidly growing communications semiconductor market. Reportedly, Conexant intends to spin off this business through an initial public offering targeted for January 2001 followed by a tax-free distribution of the remaining shares six months after the IPO. In our opinion, the spin off of the Internet infrastructure business will likely unlock significant value from Conexant's stock and we believe that this was the primary motivation for the company to initiate such a transaction. Given Wednesday's closing price of $37.06, Conexant's market capitalization is approximately $9.2 billion. Applying forward price to sales multiples from competing pure-play communications semiconductor companies we believe that the Internet infrastructure business, as a stand-alone entity, has the potential to generate a $10 billion market valuation."
Please Note: Robertson Stephens is acting as an adviser in Conexant's acquisition of Novanet Semiconductor and therefore, in keeping with Firm policy, our rating on Conexant is "No Rating." |
