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Analog Devices-Maxim Merger Receives Shareholder Approval

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Analog Devices, Inc. (ADI - Free Report) and Maxim have received approval from their shareholders for the proposed merger of both the companies.

The transaction is expected to be completed in the summer of 2021, subject to other customary closing conditions, including receipt of certain non-U.S. regulatory approvals.

In July, Analog Devices entered into a deal to acquire Maxim in an all-stock transaction that values the combined enterprise at more than $68 billion.

Maxim, which is an original equipment manufacturer of semiconductor analog and mixed signal integrated circuits, will complement and expand Analog Devices’ chip portfolio if the deal materializes.

We believe the Maxim acquisition will aid Analog Devices to create tremendous value for customers in the days ahead. This, in turn, will continue to drive its momentum across shareholders.

Analog Devices Stands to Gain

The deal is expected drive Analog Devices’ growth across several emerging growth markets.

Moreover, the deal will expand the company’s total addressable, allowing it to cater to staggering demand in some of the promising markets including industrial, automotive and telcommunications.

Analog Devices is likely to gain strong traction across autonomous driving, 5G network and several other applications on the back of Maxim’s robust chip offerings that are usable in communications, healthcare cars, manufacturing, energy, as well as connected devices.

Further, the underlined acquisition is anticipated to be accretive to the company’s revenues in the upcoming quarters.

Bottom Line

The latest move of Analog Devices is in sync with its strong efforts to bolster presence in the semiconductor industry, which is the backbone of several other industries and sectors.

According to the Semiconductor Industry Association data, worldwide semiconductor sales are anticipated to grow 3.3% in 2020 and 6.2% in 2021 amid the coronavirus pandemic.

We believe the company’s acquisition strategy and strong focus on development of new technology in order to strengthen the portfolio of sensors, data converters, amplifiers and other signal processing products will continue to shape its growth trajectory and sustain momentum in the semiconductor industry.

Zacks Rank & Stocks to Consider

At present, Analog Devices has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Dropbox (DBX - Free Report) , and Intuit Inc. (INTU - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate of Dropbox and Intuit is pegged at 34.4% and 12.3%, respectively.

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