Aliso Viejo-based Microsemi Corp.’s $2.2 billion bid to acquire Sunnyvale chipmaker PMC-Sierra Inc. is the latest deal in the sizzling chip sector, which has already seen record activity this year.
A deeper look at some of Microsemi’s priciest deals in terms of revenue multiples speaks to the changing climate, as well as to the company’s growth in the past five years:
• Its $430 million buy of Mountain View-based Actel Corp. in 2010 represented a multiple of about two, with the company generating about $200 million in annual revenue.
• The $632 million hostile takeover of Zarlink Semiconductor Inc. a year later came in at about three times the Canadian chipmaker’s annual revenue.
• Microsemi’s pending $2.2 billion bid for PMC, which trumped competitor Skyworks Solutions Inc.’s $2 billion offer, is about four times PMC’s annual revenue of $525 million.
“It is our biggest deal, but at the same time we’re a much bigger company now,” said Rob Adams, vice president of corporate development.
Indeed, Microsemi has more than doubled revenue since 2009 to $1.1 billion.
Transactions in the chip sector have topped $105 billion this year, up from $46.3 billion last year, according to New York-based Dealogic.
The two previous records were in 2006 ($75.2 billion) and 2000 ($70.3 billion).
“The fundamentals warrant continued consolidation,” Adams said. “The markets continue to say there’s cheap paper out there to go out and get it done.”
Gaming Mystery
Santa Monica-based Activision Blizzard Inc.’s decision to launch a division solely geared to eSports shouldn’t come as a surprise, but the fact that it won’t be run under the banner of Irvine subsidiary Blizzard Entertainment Inc. is a bit of a head-scratcher.
The local unit’s StarCraft franchise helped usher in competitive gaming in the 1990s and televised events a decade later. Its BlizzCon event this weekend at the Anaheim Convention Center will feature the global finals for “StarCraft II,” “World of Warcraft,” “Heroes of the Storm,” and “Hearthstone,” where players will compete for more than $4 million in prizes across the Road to BlizzCon tournaments.
This year Blizzard Entertainment launched Heroes of the Dorm, the first collegiate eSports event, which was televised on ESPN2 and drew more than 6,000 collegiate players from more than 460 schools. The games have become top-viewed titles on San Francisco-based twitch.tv, the largest live-streaming site for game content that attracts more than 100 million monthly visitors.
To be fair, Activision Publishing hosts the annual Call of Duty Championship, the top console eSports franchise in the world. In September it announced the Call of Duty World League, which provides a $3 million prize pool. Its “Destiny” game is the most watched console title on Twitch.
Snap App
Irvine-based Toshiba America Business Solutions Inc. is now in the consumer app business, releasing its first offering last week to coincide with the Los Angeles Clippers’ home opener at Staples Center.
Its PictureMe augmented-reality app for iOS and Android smartphones projects a digital image of a fan’s favorite Clipper and snaps a picture or two of them together in a combined image.
The app also includes Los Angeles Kings players. The image can be uploaded on LA Interactive’s array of high-definition displays and video walls powered by TABS, a U.S. unit of Japan-based Toshiba Corp. that makes and markets a variety of products, including printers, software and digital displays.
