Parade Technologies, Ltd., a leading supplier of video displays and interface ICs headquartered in Silicon Valley, and Cypress Semiconductor Corporation (NASDAQ:CY), a supplier of high-performance ICs for embedded systems, announced that they have entered into a definitive agreement under which Parade will acquire Cypress’s TrueTouch®Mobile touchscreen business for an aggregate acquisition price of US$100 million in cash.
Post-acquisition, Parade will provide TrueTouch® solutions to mobile customers and expand into other consumer-oriented segments. Markets to be served by Parade will include smartphones, tablets, notebooks/PCs, monitors, wearable technology, GPS systems, digital cameras, and certain industrial segments. Leveraging its deep knowledge and customer relationships, Cypress will continue to provide TrueTouch® solutions to its automotive and home appliance customers and CapSense® button-replacement solutions to its mobile customers.
Parade believes that this acquisition will substantially expand its addressable market. Combining Parade’s leadership position in Embedded DisplayPort (eDP) timing controllers with Cypress’s state-of-the-art technology in capacitive touch-sensing, Parade expects to provide platform-level solutions with a complete portfolio of products for its display customers. The acquisition will also improve the operational efficiency of the industry supply chain.
“We believe Cypress’s leading technology and unmatched IP portfolio in touch-sensing will provide us with immediate growth opportunities, increasing our scale and diversifying our revenue and customer base,” said Jack Zhao, Chief Executive Officer of Parade. “More importantly, the combination of two technology leaders will enable Parade’s roadmap for display and touch integration solutions in mobile display.”
“Mobile capacitive touchscreen solutions are increasingly being integrated directly into the display system,” said Hassane El-Khoury, Executive Vice President of Cypress’s Programmable Systems Division and Software. “Parade’s advanced display solutions are truly best in class. Its relationships with Tier 1 PC and consumer electronics manufacturers make it an excellent choice to continue to provide our customers with advanced technology and product roadmaps that the industry requires.”
Cypress’s TrueTouch capacitive touchscreen solutions deliver robust performance and a natural user experience in a broad range of challenging environments with best-in-class waterproofing, noise immunity, passive stylus and glove-touch modes, as well as proximity sensing and face detection. The company’s unmatched IP portfolio is backed by hundreds of capacitive touch-sensing patents and includes true, single-layer sensor solutions with Cypress’s Single-Layer Independent Multi-touch (SLIM®) sensor for dramatically reduced touchscreen costs.
Parade intends to fund the transaction with $100 million cash on hand. The transaction, which is subject to customary closing conditions, is expected to close during the third quarter of 2015. Lazard Frères & Co. LLC served as financial advisor and Morgan Lewis & Bockius LLP served as legal counsel to Parade. Wilson Sonsini Goodrich & Rosati acted as legal counsel to Cypress.(Original Source)
Shares of Cypress Semiconductor closed yesterday at $13.14 . CY has a 1-year high of $16.25 and a 1-year low of $8.04. The stock’s 50-day moving average is $13.21 and its 200-day moving average is $13.89.
On the ratings front, Cypress Semiconductor has been the subject of a number of recent research reports. In a report issued on June 2, Wedbush analyst Betsy Van Hees reiterated a Buy rating on CY, with a price target of $17, which implies an upside of 29.4% from current levels. Separately, on June 1, Needham’s Rajvindra Gill maintained a Buy rating on the stock and has a price target of $20.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Betsy Van Hees and Rajvindra Gill have a total average return of 19.2% and 24.4% respectively. Hees has a success rate of 55.8% and is ranked #234 out of 3621 analysts, while Gill has a success rate of 66.5% and is ranked #28.
Cypress Semiconductor Corp with its subsidiaries, designs, develops, manufactures and markets high-performance, mixed-signal, programmable solutions that provide customers with rapid time-to-market and system value.