MSDW weighs in on Malleable acquisition:
ú PMCS announced the acquisition of Malleable Technologies in a stock transaction valued at $225MM (6/14 PMCS close). The acquisition is expected to close in C3Q00 and is the first of recent acquisition to be accounted for as a purchase. Going forward, our estimates will now be stated on an earnings-before-goodwill basis. Malleable has 40 employees and we expect a minimal amount of goodwill amortization.
ú We believe Malleable's voice-over-packet ICs complement PMCS's existing product lines, providing voice and packet processing in one chip. The acquisition adds DSP, algorithms, firmware, and software expertise to PMCS's access product line, the company's largest division.
ú Key applications at the edge of IP/ATM networks include voice gateways, routers, multi-service access multiplexers, and wireless base stations. High volume list prices range from $239 to $329 per chip, reflecting the high value added content per chip.
ú We maintain our Outperform rating. This is consistent with our belief PMCS will expand its dollar content per system, as they define and control more of the customers' WAN hardware architecture. |
