SYNA - Why Shares of DSP Group Soared 17.5% Today
Shares of DSP Group (NASDAQ: DSPG) were up 17.5% as of 1 p.m. EDT. The small fabless semiconductor designer is being acquired by larger peer Synaptics (NASDAQ: SYNA) for $22 per share (a premium to where the stock closed last Friday, thus the 17.5% jump higher), which will be payable in cash to DSP Group shareholders should they approve the merger.
The total purchase price for DSP Group represents an enterprise value of about $400 million (market cap of $532 million, minus cash and equivalents of $129 million DSP had on hand as of the end of June). Synaptics has enough liquidity to afford the purchase (cash and equivalents of $836 million as of the end of June), but that was offset by debt of $881 million at the end of its last quarter. Shelling out more cash for DSP will further weaken Synpatics' balance sheet for now, but it's profitable so it should replenish that cash in short order.
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Why Shares of DSP Group Soared 17.5% Today