Should be a good deal. See article below. Anyone have a summary of the conference call held last week??
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A service of Semiconductor Business News, CMP Media Inc.
Story posted 6:30 a.m. EDT/3:30 a.m. PDT, 11/13/98
Cypress prepares to hit the acquisition trail
By Will Wade
SAN JOSE--Cypress Semiconductor Corp. here announced it has filed notice with the Securities and Exchange Commission of its intent to raise $300 million through the sale of securities. Company president and CEO T.J. Rodgers predicted that the SRAM recession that has plagued Cypress's revenues throughout the year is coming to an end, and he wants to position the company to capitalize on the expected growth phase.
Although Emmanuel Hernandez, vice president of finance and chief financial officer, said there are no deals currently on the table, he made it clear what the funds are intended for. "This is part of our ongoing effort to grow the company through acquisition," he said during a meeting with financial analysts.
Although SRAM sales account for more than 40% of the company's revenues and are the largest single product area, Rodgers said that its data communication products are among the fastest growing and firms in that market would make an attractive acquisition target. "Any company in the data com market we'd buy in a minute," he said.
However, he pointed out the Cypress is not the only company aware of that market's high potential, which has driven up prices in the past for data com firms that have been put on the block. "Or, we'd look at anything else that enhances our non-SRAM divisions," Rodgers added.
Cypress is currently implementing a stock buyback plan, and its board authorized in September the purchase of up to 14 million of the company's shares as the stock price plummeted to below $6. Since then the shares have recovered to nearly double that price.
"This [filing] announcement doesn't mean we are going to turn around and sell back the shares we just bought," Rodgers pointed out. Instead, the company could raise the funds through a combination of selling off equity, debt and convertible debt. Cypress currently has cash reserves of some $270 million. |
