Avago Technologies Ltd (NASDAQ:AVGO) Buys LSI Corp (NASDAQ:LSI)
LSI Corp (NASDAQ:LSI) which is a $5.7 billion market capped memory chip and storage memory card maker has managed to lure a bigger company to make a irresistible offer that its share holders cannot reject. As per an acquisition deal announced yesterday, Avago Technologies Ltd (NASDAQ:AVGO) which boasts of a market cap of $12.41 billion and operates in the wireless technology space has bought out the firm by dishing out $6.6 billion.
On the back of this announcement, the share price of LSI Corp (NASDAQ:LSI) jumped up by a huge 38 percent during yesterday’s trading. Thanks to this surge the stock of this memory card maker shot past its prior 52 week high price point and is currently trading at 29 percent above its earlier high price point. The firm over the trailing 12 months had accounted for sales worth $2.37 billion and accumulated net income of $102 million. LSI Corp (NASDAQ:LSI) which supplied memory and storage solutions to the who’s who of the tech industry boasted of being the biggest supplier for industry leader Seagate.
With the takeover of LSI Corp (NASDAQ:LSI) by the larger Avago Technologies Ltd (NASDAQ:AVGO) analysts are predicting that the combined synergies are going to propel the new entity ahead and position it well ahead of its competition. Readers should note that Avago Technologies Ltd (NASDAQ:AVGO) counts companies like “Apple Inc. (NASDAQ:AAPL), Samsung Electronics Co Ltd, LG Electronics Inc and Huawei Technologies Co Ltd.” as its current clients and will remain a captive audience to buy the storage solutions that the combined company can offer going forward.
Commenting about the deal Avago Technologies Ltd (NASDAQ:AVGO) CEO, Hock Tan has been quoted as saying, “The wireless business’ share of Avago’s revenues will fall by half to 25 percent. This buyout will help reduce exposure to that sector’s volatility, which is only expected to increase going forward.”