18 August 2015

MACOM completes divestiture of Automotive business

M/A-COM Technology Solutions Inc of Lowell, MA, USA (which makes semiconductors, components and subassemblies for analog RF, microwave, millimeter-wave and photonic applications) has completed the divestiture of its Automotive business (announced in mid-July) to Autoliv ASP Inc for about $100m in cash, plus the opportunity to receive up to an additional $30m in cash based on the achievement of revenue-and customer-order-based earn-out targets through 2019.

The Automotive business represented about 18% of MACOM's consolidated revenue of $125m in its fiscal second-quarter 2015 (ended 3 April).

In conjunction, excluding the Automotive business (now classified as discontinued operations), for its fiscal fourth-quarter 2015 (ending October) MACOM now expects revenue of $110-114m (up 1-4.5% on fiscal Q3/2015 without Automotive), non-GAAP gross margin of 56-59%, and earnings per diluted share of $0.32-0.34.

The divestiture of the Automotive business represents "a key step towards realizing our full potential as a pure-play high-performance analog semiconductor company," says president & CEO John Croteau. "Since announcing the transaction, we have become increasingly confident in the accelerated growth of our business, which we now expect to replace the pre-divestiture earnings contribution from the Auto business within a few quarters," he adds. "With our remaining business well aligned with our high-growth, high-margin model, we expect to achieve our target of 60% non-GAAP gross margin in the first half of fiscal 2016 and 30% non-GAAP operating margin as we exit fiscal 2016. This exceptional financial profile will position MACOM in the highest-performing segment of our industry."

See related items:

MACOM divesting Automotive business to Autoliv

Tags: M/A-COM

Visit: www.autoliv.com

Visit: www.macomtech.com