Tuesday, March 30, 2010

Dare I say it? A full and fair price for an acquisition! White Electronic Designs (WEDC,MSCC)



Shares of Phoenix-based defense semiconductor firm White Electronic Designs (WEDC) are up 28% today, on news they will be acquired by Microsemi (MSCC).  White's chips help make GPS-guided munitions significantly more accurate than they would be otherwise.


Details:
IRVINE, Calif. and PHOENIX, March 30, 2010 (GLOBE NEWSWIRE) -- Microsemi Corporation (Nasdaq:MSCC - News), a leading manufacturer of high performance analog mixed-signal integrated circuits and high reliability semiconductors, announced today that it has entered into a definitive agreement to acquire White Electronic Designs Corporation (Nasdaq:WEDC - News) through a cash tender offer at $7.00 per share for a net transaction value of approximately $100 million, net of White Electronic's projected cash balance at closing.

The offer of $7 per share works out to about $163million, but one should back out White's $64million in balance sheet cash.  That "net" offer of $100 million is still a pretty healthy 21x earnings and free cash flow.  A nice full and fair price for WEDC shareholders!
Microsemi shares are up 1.5%, as possible room for cost-cutting at WEDC should make this deal nicely accretive to earnings.

Copyright 2010 AlphaNinja

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