Tower Semiconductor soars 50 % on ~$5.4B acquisition by Intel

May 03, 2022

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Intel (NASDAQ:INTC) is acquiring Tower Semiconductor (NASDAQ:TSEM) for $53 per share in cash, representing a total enterprise value of ~$5.4B.

The acquisition advances Intel 's IDM 2.0 strategy as the company expands its manufacturing capacity, global footprint and technology portfolio to address industry demand.

Intel said the acquisition accelerates its path to becoming a major provider of foundry services and capacity globally.

The companies added that the complementary transaction brings together Intel 's leading-edge nodes and scale manufacturing with Tower Semiconductor's specialty technologies and customer-first approach.

Intel intends for its Intel Foundry Services (IFS) and Tower to become a fully integrated foundry business.

'Tower's specialty technology portfolio, geographic reach, deep customer relationships and services-first operations will help scale Intel 's foundry services and advance our goal of becoming a major provider of foundry capacity globally," said Intel CEO Pat Gelsinger.

'This deal will enable Intel to offer a compelling breadth of leading-edge nodes and differentiated specialty technologies on mature nodes - unlocking new opportunities for existing and future customers in an era of unprecedented demand for semiconductors," added Gelsinger.

IFS and Tower Semiconductor will run independently until deal closure; IFS will continue to be led by Randhir Thakur, president of IFS, and Tower will continue to be led by its CEO Russell Ellwanger during this time.

Intel intends to fund the acquisition with cash. The transaction is expected to be immediately accretive to Intel 's non-GAAP EPS.

The deal is approved by Intel 's and Tower's boards of directors and is subject to certain regulatory approvals and customary closing conditions, including the approval of Tower's stockholders.

The transaction is expected to close in nearly a year.

Over the current book year the total revenu from the company based in Migdal Haemeq will be 1.68 billion USD (consensus estimates). This is rather significant more than 2021's revenue of 1.51 billion USD.

Historical revenues and results Tower Semiconductor Ltd plus estimates 2021

The analysts expect for 2021 a net profit of 248 million USD. The majority of the analysts expects for this year a profit per share of 2.24 USD. The PE-ratio therefore is 21.64.

Analysts don't expect the company to pay a dividend. The average dividend yield of the semiconductor companies is a limited 1.12 percent.

Tower Semiconductor Ltd 's market value equals around 5.23 billion . 70

On Monday, the stock closed at 48.47 USD.

Historical stock prices Tower Semiconductor Ltd2007-2021

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