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Technology Stocks : PMC-Sierra (PMCS) -- Ignore unavailable to you. Want to Upgrade?

To: Rustam Tahir who wrote (3181)	3/6/2000 9:57:00 AM
From: SJS	Read Replies (1) \| Respond to of 3818

CSFB report: ______________ PMC-Sierra (PMCS-$201- Strong Buy-Cap $31.6B) PMCS Augments Strategic Position with Acquisition of Two Start-Ups; Raising Price Target to $250 ú PMCS acquired two private companies on Friday: AANetcom of Allentown, PA (for about $900 MM in stock) and Extreme Packet Devices of Ottawa, Canada (for $415 MM in cash and stock). ú We view both of these acquisitions very positively believing that AANetcom?s low power, gigabit/terabit serial backplane provides PMCS with additional higher layer, CMOS-based expertise while EPD provides needed OC-48 and OC-192 traffic management capabilities. ú Similar to the Abrizio acquisition, these acquisitions should enhance PMCS?s strategic position for 2001 and beyond. While these additions may be slightly dilutive in the near-term (owing to the increase in share count) we do not anticipate them to be dilutive on an operating basis. ú Given these strategic additions, as well as PMCS?s accelerating ROIC, we raise our price target to $250. While our model remains unchanged until these deals close, we do believe there is upside to our estimates. CSFB served as a financial advisor to PMCS on these transactions.