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Atmel Corporation (ATML - Analyst Report) recently came up with an acquisition agreement to purchase Ozmo, Inc. (Ozmo). The acquisition, which is likely to be directly accretive to the company’s earnings by 2014, is scheduled to close by the end of 2012.

With the acquisition of Ozmo, Atmel will be able to facilitate the growth of its wide range of wireless services including The Internet of Things through augmenting the capability of its developers. The company will be deploying Ozmo’s Wi-Fi Direct technologies to enhance the efficacy of its wireless personal area network’s (WPANs) entire communication system.

Ozmo's Wi-Fi solution, particularly introduced for consumer electronics industry, can easily integrate fixed and portable peripheral devices with Wi-Fi portals through its low power and low cost solutions. While we await further details on the agreement, we assume that this latest acquisition would stimulate the company’s position in the wireless networking market.

Management expects that this acquisition will seamlessly strengthen Atmel’s productivity moving ahead. The company believes that Ozmo's Wi-Fi Direct products would help it enhance its presence in the industry.

Earlier, Atmel reported a net income of $43.0 million or 10 cents per share in the third quarter of 2012 compared to a net income of $37.4 million or 8 cents per share in the second quarter of 2012. The reported earnings were ahead of the Zacks Consensus Estimate of 5 cents per share. The company reported net sales of $361 million in the third quarter of 2012, down 24.7% year over year and 2% sequentially.

Atmel is a globally renowned enterprise; it operates in an intensely competitive landscape. The company’s primary competitors include big players such as LSI Corporation and Semiconductor Manufacturing International Corp. (SMI - Snapshot Report).

The current Zacks Consensus Estimates for Atmel are 3 cents and 18 cents for the fourth quarter and full year 2012, respectively. The lingering weakness in the macro economy is reflected in the stock’s Zacks #3 Rank for the short term. We also maintain a long-term Neutral recommendation on Atmel.

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