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Primeur weekly 2016-11-28

Exascale supercomputing

Japan plans supercomputer to leap into technology future, according to Reuters ...

Quantum computing

Bridging the advances in AI and quantum computing for drug discovery and longevity research ...

Single photon converter - a key component of quantum internet ...

Light on the quantum computer ...

Construction of practical quantum computers radically simplified ...

Focus on Europe

India to become Associate Member State of CERN ...

PRACE looks back on a successful week at SC16 ...

PRACE has issued Newsletter 18 ...

Middleware

Bright Computing announces partnership with Beta IT ...

New update available for Solid Sands' SuperTest Mondrian release ...

Hardware

KEEP programme proves to boost application performance for KNL ...

At Bates, high-performance computing is for everyone - not just superheroes ...

Macom announces definitive agreement to acquire AppliedMicro ...

RSC Tornado with 72-cores Intel Xeon Phi 7290 sets a new world record of computing density of 1.41 Pflops per rack ...

Applications

Clemson scientists unveil software that revolutionizes habitat connectivity modelling ...

Computer modelling could lead to new method for detecting, managing prostate cancer ...

Stellar simulators ...

TGen awarded $200,000 by NVIDIA Foundation to accelerate its technology ...

A new perovskite could lead the next generation of data storage ...

Making spintronic neurons sing in unison ...

When nerve cells detect patterns for acquired knowledge ...

Machine learning to help physicians ...

ASC17 to compete on the Sunway TaihuLight ...

XSEDE Stampede supercomputer models 3D human pre-initiation complex ...

BSC researchers demonstrate that scaling-in on large-memory nodes saves up to 52% of energy consumed in HPC systems ...

TOP500

The CEA Tera1000 Bull sequana by Atos enters the TOP500 most powerful supercomputers in the world ...

The Cloud

Inspur joins OpenStack Foundation as the newest gold member ...

IBM triples Cloud data centre capacity in the UK ...

Oracle buys Dyn ...

Desktop Grids

PrimeGrid's Seventeen or Bust subproject ...

Macom announces definitive agreement to acquire AppliedMicro

21 Nov 2016 Lowell - Macom Technology Solutions Holdings Inc., a supplier of high-performance analogue RF, microwave, millimeterwave and photonic semiconductor products, has entered into a definitive agreement to acquire Applied Micro Circuits Corporation, a global expert in Connectivity and Computing solutions for next-generation Cloud infrastructure and data centres, for approximately $8.36 per share, consisting of $3.25 in cash and 0.1089 Macom shares per share of AppliedMicro. This price for each share of AppliedMicro represented a 15.4% premium over the company's closing price of $7.25 on November 18th. Macom intends to divest the well-positioned but non-strategic Compute business within the first 100 days of closing.

Transaction highlights include:

  • Transaction valued at approximately $770 million for AppliedMicro's approximately $165 million in TTM revenue (including the Compute business) and $82 million of cash and short-term investments at September 30, 2016
  • Macom and AppliedMicro's pro forma combined TTM revenue was approximately $709 million including AppliedMicro's Compute business, or approximately $644 million excluding the Compute business
  • AppliedMicro's Connectivity business is highly complementary to Macom's product portfolio, through the addition of market-leading OTN framers, MACsec Ethernet networking components and the industry's leading single-lambda PAM4 platform
  • Transaction to accelerate Macom's significant growth in optical technologies for Cloud Service Providers and Enterprise Network customers serving the high-growth, high-margin Data Center market
  • AppliedMicro's leadership PAM4 solutions based on FinFET technology and custom engagements with top-tier data centre and service provider customers is expected to strengthen Macom's competitive position with those customers
  • Macom expects to improve the profitability of AppliedMicro by divesting the Compute business and by delivering on substantial revenue and cost synergies
  • Excluding the Compute business, Macom expects this transaction to be accretive to its non-GAAP gross margin, non-GAAP operating margin and non-GAAP EPS, in Macom's fiscal year ending September, 2017
  • Macom to benefit from over $600 million of tax net operating loss carry forwards

Commenting on the transaction, John Croteau, President and Chief Executive Officer, stated: "This transaction will accelerate and expand Macom's breakout opportunity in Enterprise and Cloud Data Centres. Macom will now be able to provide all the requisite semiconductor content for optical networks - analogue, photonic and PHY - from the switch to fiber for long haul, metro, access, backhaul and Data Centre. AppliedMicro's 100G to 400G single-lambda PAM4 platform should perfectly complement Macom's leadership in analog and photonic components for Data Centres.

"Notably, the IEEE recently recommended the adoption of AppliedMicro's single lambda PAM4 solution to be an industry standard for enterprise and Data Centre connectivity, positioning this technology as the solution of choice going forward. Additionally, AppliedMicro's Connectivity business aligns well with Macom's differentiated, high-growth business model, offering non-GAAP gross margins well in excess of Macom's long term target operating model, long product life cycles, and sticky customer relationships."

"AppliedMicro also provides value-added technologies including SerDes, high speed analog-to-digital and digital-to-analogue converters with industry-leading engineering competencies and long product lifecycles. Importantly, we expect that this transaction will establish Macom with an incumbent position supplying strategic components and enterprise and Cloud Data Centre customers."

Macom intends to divest AppliedMicro's well-positioned Compute business within 100 days from closing the transaction, as the business does not strategically align with Macom's long-term focus. AppliedMicro has been exploring strategic options for the Compute business and there is known strategic interest among several potential buyers and investors. Macom will continue to support Compute customers and partners during this transition.

"This is an exciting day for AppliedMicro, and we are pleased to be joining forces with Macom. The transaction affirms the value that our employees have created and provides a strong path forward for our Connectivity business while delivering AppliedMicro stockholders a robust premium", stated Paramesh Gopi, President and CEO, AppliedMicro. "This transaction will create an industry powerhouse with the scale, deep customer relationships, innovative technology, and enabling products that will help deliver explosive growth in Enterprise and Cloud Data Centres. In addition, this agreement provides a promising path forward for the Compute business, which is in the process of bringing AppliedMicro's highly-competitive third-generation X-Gene processor to market. X-Gene is well-positioned to address the large opportunity for mainstream server processors with its proven high performance cores, scalable interconnect and high per socket memory capabilities."

Macom intends to commence a tender offer to purchase each outstanding common share of AppliedMicro for approximately $8.36 per share, consisting of $3.25 in cash and 0.1089 Macom shares per share of AppliedMicro. MACOM will assume certain equity awards held by AppliedMicro employees. The transaction value is approximately $770 million in diluted equity value, or approximately $688 million net of AppliedMicro's cash position of approximately $82 million as of September 30, 2016. The transaction is expected to be accretive to Macom's non-GAAP gross margin, non-GAAP operating margin and non-GAAP EPS in fiscal year 2017, excluding the Compute business. AppliedMicro stockholders are expected to own approximately 15% of the combined company on a pro forma basis. Macom expects to pay the cash portion of the acquisition price from cash on hand. The boards of directors of both companies have approved the transaction, which is subject to customary closing conditions and regulatory approvals. Macom currently expects the transaction to close in the first calendar quarter of 2017.

Evercore is acting as exclusive financial advisor and Ropes & Gray LLP is serving as legal counsel to Macom.

Morgan Stanley & Co. LLC is acting as exclusive financial advisor and Pillsbury Winthrop Shaw Pittman LLP is serving as legal counsel to AppliedMicro. The board of directors of AppliedMicro received a fairness opinion from Morgan Stanley & Co. LLC and Needham & Company, LLC.
Source: Macom Technology Solutions Holdings Inc.

Back to Table of contents

Primeur weekly 2016-11-28

Exascale supercomputing

Japan plans supercomputer to leap into technology future, according to Reuters ...

Quantum computing

Bridging the advances in AI and quantum computing for drug discovery and longevity research ...

Single photon converter - a key component of quantum internet ...

Light on the quantum computer ...

Construction of practical quantum computers radically simplified ...

Focus on Europe

India to become Associate Member State of CERN ...

PRACE looks back on a successful week at SC16 ...

PRACE has issued Newsletter 18 ...

Middleware

Bright Computing announces partnership with Beta IT ...

New update available for Solid Sands' SuperTest Mondrian release ...

Hardware

KEEP programme proves to boost application performance for KNL ...

At Bates, high-performance computing is for everyone - not just superheroes ...

Macom announces definitive agreement to acquire AppliedMicro ...

RSC Tornado with 72-cores Intel Xeon Phi 7290 sets a new world record of computing density of 1.41 Pflops per rack ...

Applications

Clemson scientists unveil software that revolutionizes habitat connectivity modelling ...

Computer modelling could lead to new method for detecting, managing prostate cancer ...

Stellar simulators ...

TGen awarded $200,000 by NVIDIA Foundation to accelerate its technology ...

A new perovskite could lead the next generation of data storage ...

Making spintronic neurons sing in unison ...

When nerve cells detect patterns for acquired knowledge ...

Machine learning to help physicians ...

ASC17 to compete on the Sunway TaihuLight ...

XSEDE Stampede supercomputer models 3D human pre-initiation complex ...

BSC researchers demonstrate that scaling-in on large-memory nodes saves up to 52% of energy consumed in HPC systems ...

TOP500

The CEA Tera1000 Bull sequana by Atos enters the TOP500 most powerful supercomputers in the world ...

The Cloud

Inspur joins OpenStack Foundation as the newest gold member ...

IBM triples Cloud data centre capacity in the UK ...

Oracle buys Dyn ...

Desktop Grids

PrimeGrid's Seventeen or Bust subproject ...