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Tuesday, Jun 28, 2022

Skyworks to Buy Silicon Labs unit for $2.75B

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Skyworks Solutions Inc. (Nasdaq: SWKS), an Irvine-based maker of analog semiconductors, said it will acquire the Infrastructure and Automotive business of Silicon Laboratories Inc. (Nasdaq: SLAB) for $2.75 billion.

The all-cash asset transaction will accelerate Skyworks’ expansion into the industry’s most important growth segments, including electric and hybrid vehicles, industrial and motor control, power supply, 5G wireless infrastructure and smart homes, among other areas. Skyworks said it will be “uniquely positioned” for a market opportunity approaching $20 billion.

“By leveraging our global sales channels, operational scale and deep customer relationships, Skyworks is well-positioned to drive above-market growth, while diversifying revenues, expanding margins and delivering strong returns in earnings and cash generation," Skyworks Chief Executive Liam Griffin said in a statement.

After the announcement, shares of Skyworks rose 4.1% to $191 while the stock of Silicon Labs, which is based in Austin, jumped 13% to $163.52.

Mark Thompson, senior vice president of Silicon Labs and general manager of the Infrastructure & Automotive business, will join Skyworks as part of the transaction, reporting directly to Griffin. In addition, approximately 350 employees, including the senior management team of the business, are expected to join Skyworks upon completion of the transaction.

The transaction, which is expected to close during the third calendar quarter of 2021, has been approved by the boards of directors of both companies and is subject to customary closing conditions, including regulatory approvals.

Skyworks expects to fund the transaction with a combination of cash on hand and committed debt financing arranged by J.P. Morgan.

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