getgo234, Kurlak and Edelstone both mentioned in the San Jose Mercury News article below. So where's the upgrades and pop in the stock?
To K: you are doing your doggendest to turn a perceived silk purse into a sow's ear (at least WRT what all the analysts, and I ;-) have to say). Over on the Intel thread, if an AMD zealot or Cyrix religious fanatic is proven wrong (as much as you can prove anything in this business), or is a lone voice in the wind among many, many others, they generally limp off with tail between legs.
mercurycenter.com
Posted at 9:50 p.m. PDT Monday, June 29, 1998
LSI stepped in after
Adaptec backed out
BY MIGUEL HELFT
Mercury News Staff Writer
The objections of federal antitrust investigators
pushed a Milpitas company off the altar in its bid for
a Colorado chip maker last week, but they opened
the door for a cross-town suitor.
On Monday, LSI Logic Corp. said it would buy chip
maker Symbios Inc. for $760 million in cash only
two business days after Adaptec Inc. scrapped a
similar deal.
The Symbios acquisition, the largest deal in LSI
Logic's 17-year history, will accelerate the
company's entry into the market for chips that speed
up connections between computers and storage
devices.
The deal will also give Milpitas-based LSI Logic a
number of semiconductor technologies that are
critical to expanding its system-on-a-chip strategy,
which aims to integrate multiple functions onto a
single chip. For instance, functions that control the
movement of data in and out of a disk-drive or a
network, which currently reside on one chip, could
be integrated into a computer's central processor or
the chip that controls the main operations of a disk
drive, thereby reducing cost.
''The deal dovetails with our corporate and product
strategy,'' said Bruce Entin, vice president of
worldwide customer marketing. ''We made a foray
into storage. This strengthens our hand in the storage
market. And having the building blocks (for the
system-on-a-chip) is important.''
Entin said the deal with Symbios, a company about
half the size of LSI Logic in terms of revenue and
workforce, will also give the company ''critical
mass.''
LSI Logic is best known for customized chips used in
a number of consumer electronics products, such as
the Sony PlayStation game machine, and
communications products. Symbios, a Fort Collins,
Colo.-based subsidiary of Hyundai Electronics
America, makes adapters and chip sets used to
connect server computers to storage devices and
computer networks, as well as a number of other
silicon technologies.
The company employs about 2,500 workers
worldwide and had revenues of $620 million in
1997. That will bring LSI's workforce to nearly
6,800 and its revenues to nearly $2 billion.
LSI Logic said it had made a bid for Symbios earlier
this year, when Hyundai put the company up for sale
amid the deepening financial crisis in South Korea.
On Feb. 19, Adaptec, a maker of cards to connect
computers and peripherals, had announced it would
pay $775 million for Symbios. But just last
Thursday, Adaptec, which is also based in Milpitas,
called off the deal. Grant Saviers, president,
chairman and chief executive of Adaptec, said the
Federal Trade Commission was poised to vote to
block it. Saviers said government regulators feared
the deal would give Adaptec dominance of the
market for a technology known as Small Computer
System Interface, or SCSI.
Entin said LSI Logic had followed reports of the
FTC probe and contacted Hyundai officials soon
after the Adaptec deal was canceled. The deal was
finalized over the weekend.
Although the LSI Logic bid for Symbios will also
have to be approved by regulators, the two
companies have little overlap, Entin said. ''We are
very confident about FTC approval,'' he said.
LSI said it had not made specific plans to integrate
the two companies and did not know whether the
deal would lead to layoffs.
Analysts said the deal was a good one for LSI Logic
as it helped the company diversify its business and
grow in the high-volume market for storage
technology chips. The company is looking for ways
to revive its stagnant growth. Its profit fell 21
percent last quarter because of dropping
semiconductor prices.
''I think it is positive,'' said Tom Kurlak, an analyst
with Merrill Lynch. ''This more than doubles their
storage business.''
''I think they are buying a very inexpensive business
that is synergistic with their foray into the storage
market,'' said Mark Edelstone, an analyst with
Morgan Stanley Dean Witter.
Saviers acknowledged the deal will put Adaptec in
more direct competition with LSI Logic but said he
wasn't concerned.
''We know where we compete with each,'' he said,
referring to Symbios and LSI Logic. ''Adding the
two together, I don't think is a real change in the
landscape.''
LSI Logic said the deal should be completed in the
quarter ending Sept. 30 and should add to the
company's earnings in 1999. LSI Logic will spend
about $200 million of its cash reserves, which
surpass $400 million, and will pay for the rest of the
deal through debt financing. LSI Logic's share rose
19 cents on news of the deal, to close at $23.31. |
