Feltl Maintains Hold On Atmel Following The Acquisition Of Newport Media


In a research note released this morning, Feltl and Company analyst Jeffrey Schreiner maintained a Hold rating on Atmel Corporation (ATML) with a price target of $8.50 following yesterday’s news that Atmel agreed to acquire Newport Media, Inc. (NMI) for $140 million in cash to gain wireless-radio capabilities.

Schreiner noted, “the NMI acquisition enhances ATML’scurrent WiFi product portfolio, with the contribution of 802.11n,while also adding low-power Bluetooth and additional firmware. ATML had stated earlier this year its intentions to buy or build low power Bluetooth which supports its move towards the Internet of Things (IoT). In CY13 Newport Media had revenue of ~$43m, implying trailing sales multiple of ~3.3x based on ~$140m and ~4x if all earnouts were paid. We would note the majority of revenue within NMI are not related to IoT products during CY13, suggesting a meaningful premium for the few technologies added thru the acquisition.”

Schreiner added, “We believe ATML’s growth prospects over the next 12 months could be supported by an improving industrial end market, opportunities in touch (smartphone/automotive), and growth opportunities in core MCU. However, following a 22% rise in ATML shares since May 1st we believe current valuation may already reflect the majority of potential future growth opportunities”.

According to TipRanks.com, analyst Jeffrey Schreiner currently has an average return of 7.5% and a 64% success rate. Schreiner has an average return of 21.6% when recommending ATML, and is ranked #770 out of 3162 analysts.

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