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   Strategies & Market TrendsSpeculating in Takeover Targets


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From: richardred5/29/2015 9:34:16 AM
   of 7036
 
Some biggie mergers. The deals keep flowing.

Is Intel about to make its biggest-ever acquisition?

by Chris Matthews

@crobmatthews

May 29, 2015, 7:55 AM EDT

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Chip giant Intel is about to get a little bit bigger.

According to a report Thursday in The New York Post, Intel INTC 1.31% is set to acquire fellow chip maker Altera Corp ALTR 3.11% for $15 billion, or $54 per share.

That’s a 15% premium over Altera’s closing price on Thursday, which came in at $46.97 per share. That’s far higher than the roughly $35 per share Altera was trading at back in March, when rumors of the deal first started to leak.

The news comes soon after Intel competitor Avago AVGO 1.99% announced a $37 billion takeover of rival chipmaker Broadcom BRCM -0.97% , a deal which was finalized on Thursday.

The main attraction of Altera for Intel, observers say, would likely be its ‘field programmable gate arrays’–integrated circuits that are designed so as to let customers or designers configure them after manufacturing. FPGAs are particularly in demand from companies who need them for data centers to run Cloud-based services.
fortune.com

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To: richardred who wrote (3915)5/29/2015 2:35:32 PM
From: richardred
   of 7036
 
Added to CTG in quantity today.

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From: Glenn Petersen5/30/2015 8:27:03 AM
   of 7036
 
Behind the Wave of Semiconductor Deals: Margin Pressures

Investors seeking fatter profit have driven the latest wave of consolidation

By Don Clark
The Wall Street Journal
May 29, 2015 7:00 p.m. ET

Chip makers are facing many pressures pushing them to combine. The biggest, though, comes from Wall Street.

The stock market lately has penalized semiconductor companies that don’t show they can improve profit margins, a tough task in a mature industry subject to fierce price pressure. Some chief executives of publicly held silicon companies also are concluding that the only way to boost share prices is to sell out. A savvy tie-up can bring cost savings or other benefits that yield fatter margins that investors love. Meanwhile, some potential buyers are flush with cash or are finding it easy to raise debt for deals that could boost their earnings.

The pressure has led to a wave of consolidation in the industry that reached a peak—perhaps momentary—with Wednesday’s announcement that Avago Technologies Ltd. AVGO 4.00 % offered a rich $37 billion for rival wireless-chip maker Broadcom Corp. BRCM 1.07 %

The pressures facing chip makers are paradoxical. Microprocessors are the engines of the digital transformation that is remaking business and cultural life world-wide. Small squares of silicon are at the center of trends that are expected to generate major growth well into the future, especially mobile computing but also the Internet of Things, which promises to put processors in everyday items from refrigerators to luggage to clothing.

Some companies that haven’t found a buyer are feeling the heat. Intel Corp. INTC 1.32 % and Altera Corp. ALTR 4.00 % recently renewed buyout talks that had stalled in April, people familiar with the matter said, after Altera shareholders such as TIG Advisors LLC protested its earlier rejection of an Intel offer at a valuation that was seen as higher than the company could reach on its own.

Intel and Altera are in advanced talks and could strike a deal as soon as Monday, people familiar with the matter said. Altera shares soared nearly 29% in March when The Wall Street Journal first reported the companies were in talks. Intel’s share price rose more than 6% then on the news.

On Thursday, Broadcom said rewarding its shareholders was the prime motivation for accepting the cash-and-stock offer from Avago, a company that has pursued acquisitions and whose shares have outpaced its peers.

The two companies predicted they could cut $750 million in annual expenses from the combined entity within 18 months of the deal closing, leading to operating profit margins of 40% versus 24% for Broadcom alone.

The push to consolidate isn’t a positive trend for employees. Avago and Broadcom said it was too early to spell out plans for head count reduction, but they pointed to duplication in support functions like sales, administration, marketing and customer support.

“To reduce costs, you have to get rid of people,” said Handel Jones, a consultant to semiconductor companies who heads International Business Strategies Inc. “This is a job-destruction activity.”

Besides cutting jobs, chip makers find they can cut costs by pushing more products using a sales force that remains roughly the same size. That tactic is expected to drive much of the $500 million in cost savings predicted by NXP Semiconductor Inc. after its $11.8 billion purchase of Freescale Semiconductor Inc. has closed.

Cypress Semiconductor Corp. CY -1.58 % has benefited in the same way from its purchase of Spansion Inc., which it acquired recently in an all-stock transaction valued at $1.6 billion when it was announced in December. The companies estimated they could deliver $135 million in cost savings in three years, in part by offering additional products without hiring more sales staff.

Cypress CEO T.J. Rodgers, who leads the combined companies, estimated that more than 1,000 employees would be laid off and 50 offices around the world would close as the operations were combined.

Beyond the cost savings, Mr. Rodgers said, the deal filled in the product line. Cypress, for example, gained access to Spansion chips that allowed it to become a supplier of electronics for cars.

“We are in the middle of a wave right now,” he said in a March interview. “The new theme is, you have to integrate to get scale to survive.”

The semiconductor industry’s consolidation coincides with declines in some chip businesses, notably for PCs, said Jon Erensen, a Gartner Inc. IT -0.84 % analyst. Meanwhile sales of tablets, which helped draw consumer dollars from PCs, have been slowing since 2013; Gartner predicts sales to grow just 4% this year. Smartphone sales outside of China are also softer than in recent years, he added.

After total chip sales grew 7.9% in 2014, Gartner recently estimated 2015 sales would grow 4% to $354 billion—and Mr. Erensen expected that forecast to be trimmed. He believed the Avago-Broadcom combination and others were inspired by what’s called the Internet of Things, the use of sensors, processors and other chips to an array of items in homes and businesses.

Investors also view chip makers less favorably than they once did. Over the past 20 years, semiconductor companies enjoyed an average price premium of 32.5% over other companies in the S&P 500 stock-index, as measured by their ratio of stock price to earnings, according to analysts at Sanford C. Bernstein. They are currently trading at a 15% discount to that index.

Tech investors more recently have preferred to put their money into companies like Facebook Inc. FB -1.19 % that have much wider profit margins and prospects of much faster revenue growth. Semiconductor margins are held down by factors like price competition from Taiwan and China, and chip makers must cut their prices accordingly.

“Pricing is collapsing,” says Stacy Rasgon, a Bernstein analyst. “The profit pool is going away.

Qualcomm Inc., QCOM -1.30 % the biggest maker of chips for smartphone, faces concerns about lower prices due to competition from rivals such as Taiwan-based MediaTek Inc. 2454 1.34 % Activist investor Jana Partners is pushing the company to consider options such as breaking up to boost its share price, which is off about 12% over the past year.

Other barriers to fat margins are technological. Miniaturization techniques that squeeze more transistors on a chip raise the cost of designing them. At the same time, device makers demand that more functions once found on separate chips—sometimes from separate companies—are integrated onto single pieces of silicon.

Companies should respond by combining with others that sell different chips, and by integrating disparate engineering disciplines, said Levy Gerzberg, the former chief executive of Zoran Corp., which was sold to British chip maker CSR CSRE -0.04 % PLC in 2011 for $679 million. “It’s not just a matter of being bigger,” he said. “By combining the two companies, we could provide a more complete solution to our customers.”

—Dana Mattioli contributed to this article.

Write to Don Clark at don.clark@wsj.com

wsj.com

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To: richardred who wrote (3727)6/1/2015 8:35:40 AM
From: richardred
   of 7036
 
A bulls-eye today.

OMG-OM Group. The first one I had this year.

OM Group, Inc. Agrees To Be Acquired By Apollo Affiliated Funds In Partnership With Platform Specialty Products Corporation For $34.00 Per Share In An All Cash Transaction.

finance.yahoo.com

P.S. A clause that leaves open a small chance of a higher bid. The merger agreement includes a "go-shop" period, during which the Board will actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals during a 35-day period following the execution date of the definitive agreement.

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To: richardred who wrote (3949)6/1/2015 8:56:31 AM
From: richardred
   of 7036
 
Intel Agrees to Buy Altera for $16.7 Billion

By CHAD BRAYJUNE 1, 2015

Continue reading the main story

Intel said on Monday that it had agreed to acquire the smaller chip maker Altera for $16.7 billion.

The deal comes after the two American companies engaged in talks earlier this year. Further discussions had been delayed, however, when Altera rejected an earlier offer by Intel, people briefed on the talks have said.

Under the terms of the transaction, Intel would pay $54 a share in cash for Altera.

By buying Altera, which makes programmable chips that can be adapted for different uses, Intel would expand its product lines beyond standard chips for personal computers and corporate servers.

“Intel’s growth strategy is to expand our core assets into profitable, complementary market segments,” Brian Krzanich, chief executive of Intel, said in a statement. “With this acquisition, we will harness the power of Moore’s Law to make the next generation of solutions not just better, but able to do more.”
Continue reading the main story
Related Coverage

Intel Takeover of Altera Is Expected MAY 29, 2015

The deal would be the latest in a wave of consolidation in the semiconductor sector as chip makers look to increase their scale and product offerings and gain leverage in negotiating with their customers and suppliers.

Last week, Avago Technologies agreed to a $37 billion takeover of Broadcom, whose chips are used in iPhones and other devices.

In March, NXP Semiconductors paid nearly $12 billion for a rival, Freescale Semiconductor, to become a top supplier of chips for use in cars and Internet-enabled devices. Qualcomm and Infineon have also made acquisitions.

Founded in 1983, Altera manufactures chips known as field programmable gate arrays, or F.P.G.A. They are lower in power and performance than standard computer chips, such as those made by Intel, but can be altered after manufacturing to carry out different functions.

That could allow Intel to offer more flexible products, such as computers or servers that combine the power of a standard semiconductor with the more easily configurable F.P.G.A. chips on a single circuit board. Intel could then build a computer server that could update its functions and so last longer in data centers.

Intel says it intends to fund the acquisition with cash on hand and debt. The transaction is expected to close is in six to nine months.

JPMorgan Chase, Rothschild and the law firms Gibson, Dunn & Crutcher and Weil, Gotshal & Manges are advising Intel. Goldman Sachs and the law firm Wilson Sonsini Goodrich & Rosati are serviving as advisers to Altera.

Altera, based in San Jose, Calif., posted net sales of $1.9 billion in 2014 and employs more than 3,000 people in over 20 countries.

Founded in 1968, Intel, based in Santa Clara, Calif., is one of the world’s largest producers of chips used in computers, servers and other devices. The company posted revenue of $55.9 billion in 2014 and employs more than 106,000 people worldwide.

nytimes.com

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To: richardred who wrote (3940)6/1/2015 10:15:35 AM
From: richardred
   of 7036
 
RE:TWTR It's big (market cap), but still not to big to be acquired. One hypothetical once Yahoo deals with a big capital gain from it's Alibaba stake. Buy TWTR and take a write off of TWTR goodwill. Marissa didn't buy AOL and Yahoo is not growing. She needs a big splash. Maybe it's time for it?


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To: richardred who wrote (3831)6/1/2015 1:42:23 PM
From: richardred
   of 7036
 
RE-TDC speculation -The cheaper alternative than Salesforce.

>Microsoft’s position in cloud space In its earnings release, Microsoft notes that cloud computing will remain the focal point of its strategy going forward. The company points out that Microsoft Azure and Microsoft Office 365 revenues almost doubled. And this can be considered a positive sign for the company’s ongoing transition from hardware to the cloud space.

According to a report from Synergy Research Group, and as the above chart shows, Amazon (AMZN) remains the unrivaled leader in the cloud space, followed by Microsoft, which registered 96% YoY (year-over-year) growth. This growth is more than any of the top five players in the cloud space. IBM (IBM), Google (GOOG), and Salesforce (CRM) round out the top five in this space.

finance.yahoo.com

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To: richardred who wrote (3955)6/2/2015 9:12:08 AM
From: richardred
   of 7036
 
When will IBM make it's move?

Snip- IBM is feeling pressure to abandon its current share repurchase strategy and use its cash for cloud-related acquisitions. Among the places to look, observers argue, are data analytics and Internet security firms. Another possible target for IBM could be a cloud-storage specialist like Box Inc., analysts said.

IBM’s 2013 takeover of SoftLayer Technologies Inc. was a hit with industry watchers who are now waiting for slumping IBM to make its next acquisition move.

Cloud, Storage Deals Likely in ’15
January 27, 2015 by George Leopold
Screen Shot 2015-01-27 at 12.43.51 PM

Look for technology merger and acquisition activity that surged last year to continue in 2015 as potential suitors in sectors like software, cloud computing and storage seek to acquire new services and consolidation quickens in crowded markets.

According to a forecast released by market watcher 451 Research, deal-making momentum that hit record levels in 2014 is expected to grow this year.

In areas such as cloud infrastructure, the 451 report noted that service providers are attempting to stave of commoditization by layering new services on top of their compute offerings. “Although partnerships can expand the portfolio, the benefits of exclusive ownership and the ability to customize [intellectual property] should lead to acquisitions in high-value segments such as information security, software development and performance monitoring,” the M&A report concluded.

In the cloud sector, companies like IBM have forged cloud partnerships with the likes of Apple. The two are partnering on a cloud platform called Bluemix designed to help developers build and run Web and mobile applications. Still, IBM is feeling pressure to abandon its current share repurchase strategy and use its cash for cloud-related acquisitions. Among the places to look, observers argue, are data analytics and Internet security firms. Another possible target for IBM could be a cloud-storage specialist like Box Inc., analysts said.

IBM’s 2013 takeover of SoftLayer Technologies Inc. was a hit with industry watchers who are now waiting for slumping IBM to make its next acquisition move.

The storage sector also appears to be ripe for deals in 2015, according to 451 Research, as vendors jockey for position as flash and other solid-state technologies dominate storage for mission-critical workloads. “That has sparked a wave of acquisitions by not only storage systems vendors, but also former component manufacturers,” 451 said. “The remaining startups are rapidly hitting make-or-break points, with a few likely to be sold for scrap while at least one or two others fetch multibillion-dollar valuations in an IPO.”

Some storage acquisitions have progressed to spin outs. For example, SanDisk Corp. announced earlier this month the spin out of its ioControl hybrid storage unit that reemerged as NexGen Storage. Under the arrangement, SanDisk will supply NextGen with PCIe flash and disk drives as the new storage company focuses on hybrid flash arrays.

Elsewhere in the storage sector, persistent rumors last fall that market leader EMC Corp. was in play have so far failed to result in a deal. Among the most oft-mentioned suitors are Hewlett-Packard, which made several cloud acquisition last year, and Dell. Last fall, HP acquired Eucalyptus Systems, the developer of open source software used to build private and hybrid clouds.

The market researcher also projected that the data management sector is ripe for deals in 2015 as more workloads move to the cloud. “Look for integration [platform-as-a-service vendors] to evolve beyond [software-as-a-service] to on-premises integration, likely taking share from legacy vendors,” 451 Research forecast.

Other macroeconomic indicators pointing to another big year for tech merger and acquisitions include “bullish sentiment from corporate acquirers and bankers” and a “re-energized private equity market,” 451 Research concluded.



P.S. TIBCO to Be Acquired By Vista Equity Partners for $24.00 Per Share in Cash
Transaction Values TIBCO at Approximately $4.3 Billion
tibco.com

Teradata Corp. (NYSE: TDC), the big data analytics and marketing applications company, today announced that it completed the acquisition of RainStor, a privately held company specializing in online big data archiving on Hadoop. This acquisition strengthens Teradata’s enterprise-grade Hadoop solutions and will enable organizations to add archival data store capabilities for their entire enterprise, including data stored in OLTP, data warehouses, and applications.

“The addition of RainStor underscores Teradata’s commitment to support customers as they transform their organizations into data-driven enterprises,” said Scott Gnau, president, Teradata Labs. “The new archival capability will help customers cost-effectively and efficiently address their data archiving requirements using Hadoop.”

It is Teradata’s fourth big data-related acquisition this year; the other acquired companies include Revelytix, Hadapt, and Think Big Analytics. The four acquisitions demonstrate Teradata’s focus on helping customers derive meaningful value from all of their data.
teradata.com

Hopkinton, Mass., October 28, 2014 -

Today EMC Corporation (NYSE:EMC) announced the acquisition of three cloud technology companies: The Cloudscaling Group, Inc., Maginatics, Inc. and Spanning Cloud Apps, Inc. Each company brings to EMC deep expertise and powerful capabilities that enable EMC to extend the reach of its hybrid cloud vision across cloud infrastructure, storage and data protection. The acquisitions, together with today’s announcement of the EMC Enterprise Hybrid Cloud Solution, underscore EMC’s commitment to customers to deliver choice and agility in hybrid cloud deployments.
emc.com

Hortonworks to Acquire SequenceIQ to Speed Hadoop Deployments into the Cloud SANTA CLARA, Calif. and BRUSSELS, April 13, 2015

financial.tmcnet.com

The cloud-storage war continues with Dropbox’s acquisition of Readmill
venturebeat.com

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From: richardred6/2/2015 9:42:52 AM
   of 7036
 
April 2015 | 12th edition

Global Capital Confidence Barometer
Innovation, complexity and disruption define the new M&A market

Our 12th Global Capital Confidence Barometer finds the global M&A market maintaining the positive momentum that developed during 2014. For the first time in five years, more than half our respondents are planning acquisitions in the next 12 months, as deal pipelines continue to expand.

Executives express increasing optimism in the global economy, with much broader consistency across geographies than in 2014. This economic optimism, combined with steady confidence in corporate earnings and other leading market indicators, is fostering an environment where companies are preparing bolder moves, including M&A, to generate future value.

Our survey reveals three key reasons for the sharp increase in dealmaking intentions. First is the arrival of new entrants — both startups and companies returning to the market after staying on the sidelines for several years. Second, divergent economic conditions are accelerating cross-border M&A, as existing momentum in many developed markets is further fueled by falling oil prices and currency fluctuation. And third, disruptive innovation is driving dealmaking at every level of the enterprise.

Of course, challenges remain prominent on the boardroom agenda. Greater volatility in commodity and currency markets, geographic divergence in economic conditions and monetary policies, and lingering geopolitical concerns all present complexity. As well, rapid technological change is creating new risks such as cybersecurity, which has emerged as a core business issue that must be managed as part of the dealmaking process.

Notwithstanding these risks, the overall view in this Barometer is of a global M&A market on an upswing after years of crisis. Companies are learning to create opportunity and drive growth amid a more competitive economic and geopolitical landscape. After a half-decade of stagnation, we are seeing the bold beginnings of a new kind of M&A market — one marked by innovation, complexity and disruptive change.
Photo of Pip McCrostie
Pip McCrostie

EY Global Vice Chair – Transaction Advisory Services

73%
of M&A activity will be innovative investment



ey.com

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To: richardred who wrote (3954)6/3/2015 5:56:15 PM
From: richardred
   of 7036
 
Google Buying Twitter an ‘Instant Fit,' Investor Sacca Says

.

Bloomberg By Sarah Frier 32 minutes ago

Longtime Twitter Inc. investor Chris Sacca said it would be a good fit with Google Inc. in a merger scenario, even as he pushed for the company to improve its products and services to lure more users and advertisers.

“I think it would be a fantastic use of Google’s cash,” Sacca said on CNBC Wednesday, when he was asked whether Twitter should remain independent. “It’s an instant fit. This is the thing that Google never had. They’ve never understood social, have never understood those personal interactions. This bolts in quite clearly.”

More from Bloomberg.com: Jamie Dimon Becomes Billionaire Ushering in Era of the Megabank

Sacca’s comments follow his 8,500-word blog post on Wednesday calling on Twitter to broaden its appeal with new products to highlight the company’s content around live events and popular discussions. If Twitter follows suggestions like his, he said the company has a better chance of remaining independent. If not, he said Google, Microsoft Corp. or Facebook Inc. should make bids for San Francisco-based Twitter.

“I believe Twitter can be so much more than it is today,” said Sacca, who invests through his firm, Lowercase Capital LLC.

Sacca, known for being Twitter’s biggest cheerleader, has begun publicly criticizing the company for not taking advantage of its strengths. Still, the missive from an influential early investor adds to the burden facing Chief Executive Officer Dick Costolo, who has struggled to boost Twitter’s users, even after replacing managers of its product and engineering teams. Twitter’s member base was 302 million monthly users in the first quarter -- about a fifth of Facebook’s audience.

More from Bloomberg.com: Putin's Secret Budget Hides Shift Toward War Economy

Jim Prosser, a spokesman for Twitter, and Winnie King, a spokeswoman for Mountain View, California-based Google, didn’t immediately respond to requests for comment.

Twitter is also holding its annual shareholders meeting today.
Bigger Risks
Twitter should take bigger risks, Sacca said. He pointed out that almost 1 billion people who have used Twitter didn’t stick with it. He predicted that some big changes -- such as apps that would organize posts by topic as opposed to chronologically, or prompts that help users decide what to post -- would bolster Twitter’s appeal.

Twitter, which lets users post 140-character updates with photos or video, has “failed to tell its own story to investors and users,” Sacca said. The stock has dropped 28 percent since late April, when the company cut its sales forecast and reported revenue that fell short of analysts’ estimates, prompting some of them to raise concerns about management’s credibility and assessment of advertiser and consumer demand.

More from Bloomberg.com: A 99-Year-Old Wall Street Veteran Reveals Secrets of Her Success
Wall Street
While the stock is up more than 40 percent since a November 2013 initial public offering, it’s about half of the peak set in December of that year. The shares of Twitter rose 1.7 percent to $37 at Wednesday’s close in New York.

“The transition to being public has been rough,” Sacca wrote. “The company has disappointed Wall Street more often than not. Twitter’s earnings calls are mostly dedicated to playing defense while discussing incremental improvements to sign-up flows and tweaks to the service.”

Top Stocks for 2015

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Twitter has the potential to reach 500 million users, Sacca said in his previous blog post last month. Sacca, a former adviser to the company, also said then that he hadn’t been “as candid as I could be in public discussions about Twitter.”

Sacca also suggested today that Twitter make its service easier to use by building a separate application or service that would curate content, with the help of human editors, focused on particular live events. It would “be the place everyone visits first to see how the game is going or when the show starts,” without requiring people to log in or Tweet.
Done Right
He also suggested channels within the application that could be destinations for information about particular locations or popular topics. Other organizations, such as the National Basketball Association, could build separate applications that display Twitter posts, he said. Sacca wants Twitter to feel less lonely, and suggests adds like “hearts” and read receipts on tweets.

“Done right, and done soon, hundreds of millions of new users will join and stay active on the service, hundreds of millions of inactive users will return to the service, and hundreds millions more will use Twitter from the outside,” Sacca wrote.

More from Bloomberg.com

finance.yahoo.com

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