In sync with its strategy of growing through acquisitions,
Synopsys ( SNPS Quick Quote SNPS - Free Report) recently announced that it has signed a definitive agreement to buy semiconductor and flat panel display solutions from BISTel.
Financial terms of the deal have been kept under wraps. Synopsys also stated that the purchase isn’t material to its financials. The company anticipates to close the transaction during its fourth-quarter fiscal 2021.
Buyout to Broaden Synopsys Process Control Solutions
According to the company’s press release, BISTel, headquartered in South Korea, is a leader in engineering equipment and artificial intelligence (AI) applications for semiconductor smart manufacturing.
The acquisition is likely to broaden Synopsys’ industry-leading process control solutions with adaptive intelligence capabilities required by semiconductor fabs for enhancing manufacturing quality and efficiency.
The acquisition also adds a team of experienced engineers. This team of engineers will accelerate technology development using the real-time manufacturing predictive analysis.
Howard Ko, general manager of the Silicon Engineering Group at Synopsys, said, "Semiconductor fabs are rising to the challenge of meeting market demand for products that drive the global economy." He further added, "Combining Synopsys' and BISTel's expertise in fab solutions will enable us to bring to market innovative process control products that help our customers maximize their economic opportunity." Growing Through Acquisitions
Synopsys has made a few significant acquisitions to build its product portfolio and fuel growth. Acquisitions are central to the company’s growth strategy, and help it gain access to newer markets and technologies.
Also, since intense competition is making the Electronic Design Automation (EDA) market tougher to penetrate, acquisitions have helped the company boost revenues.
Most recently, on Jun 8, Synopsys announced acquiring application security risk management solution provider — Code Dx — to provide its customers with risk reporting capabilities across correlated software vulnerability data.
Last month, the company fortified its DesignWare Ethernet Controller IP portfolio with the acquisition of MorethanIP.
The company’s solid balance sheet and cash-flow generation capabilities have helped Synopsys acquire assets. As of Apr 30, 2021, Synopsys had cash and cash equivalents of $1.46 billion, while the long-term debt outstanding was mere $25.6 million. During the first half of fiscal 2021, the company had generated $700.3 million of cash flow from operational activities.
Zacks Rank & Other Stocks to Consider
Synopsys currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the broader technology sector include
Lam Research Corporation ( LRCX Quick Quote LRCX - Free Report) , Zoom Video Communications ( ZM Quick Quote ZM - Free Report) and Digital Turbine ( APPS Quick Quote APPS - Free Report) , all sporting a Zacks Rank #1 (Strong Buy), at present. You can see . the complete list of today’s Zacks #1 Rank stocks here
The long-term earnings growth rate for Lam Research, Zoom and Digital Turbine is currently pegged at 32.8%, 20.1% and 50%, respectively.
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