Avago Acquires Emulex for $606M

At the end of February 2015, Avago Technologies agreed to acquire Emulex. Avago is a Singapore-based chip designer that notably supplies radio-frequency chips for Apple iPhones. Emulex is a California-based computer network provider. Purchasing Emulex’s connectivity business will strengthen Avago’s portfolio and allow them to better serve the enterprise storage market.In an all cash deal, Avago will pay USD$609 million to acquire Emulex. After the announcement, Avago ended the trading session at a new lifetime high of $129.25 a share and Emulex grew by 24 percent to $7.93 a share. Avago expects that after completion of the transaction, the company will see immediate boosts in their earnings per share. Avago Technologies has shown strong growth over the past year. First quarter earnings are an impressive USD$351 million compared to last year’s USD$134 million. As a major supplier to Apple, Inc., they may be partially responsible for this growth. Apple is now the most valuable company in the world with a market capitalization of USD$758 billion, more than Exxon Mobil Corp. and Microsoft Corp. combined. It is interesting to note that two board members of Emulex are also on the board of directors at Juniper Networks. Because the board of directors have taken meetings with Elliot Management, people have begun speculating that a deal for Juniper may be in the works. On March 4th, Juniper CFO Robyn Denholm will be speaking at the Morgan Stanley Tech, Media and Telecom Conference in San Francisco. We will have to wait to see if any news breaks then. Via our proprietary website Just IT Hardware, ASAP Semiconductor is a leading supplier of Avago and Emulex products. Prospective customers can browse our inclusive inventory of hard-to-find obsolete and current Avago and Emulex parts at PC component wholesalers www.justithardware.com. If you are interested in a part, please feel free to contact our knowledgeable sales staff at sales@justithardware.com or +1-714-705-4780 for a quote.


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