Synaptics To Buy Renesas For $475 Mln, Lifts Revenue Outlook; Shares Surge

(RTTNews) - Synaptics Inc. (SYNA) Tuesday said it agreed to buy Japan-based display chip-maker Renesas SP Drivers Inc. for $475 million. The touchscreen technology company also lifted its fourth-quarter quarter revenue outlook, sending its shares surging 18 percent in after-hours trade.

Synaptics, a maker of touchscreen pads for smartphones and tablets, said it signed a deal to buy Tokyo, Japan-based Renesas SP Drivers for roughly 48.5 billion yen, or $475 million, a deal that the company expects will enhance its market opportunities.

"The acquisition of Renesas SP Drivers unites complementary and best-in-class technologies and brings on board a very experienced, highly skilled engineering team, strengthening Synaptics' position as the number one touchscreen controller supplier to the mobile display market, with unmatched platform level technologies," said Rick Bergman, President and CEO, Synaptics.

Synaptics expect the deal to be immediately accretive to its adjusted earning and to close it in the fourth calendar quarter of 2014. Synaptics plans to fund the acquisition with cash and debt financing of $300 million.

Synaptics now expect fourth-quarter revenues of $300.0 million to $310.0 million, up from its prior outlook of $275.0 million to $295.0 million. The company lifted its outlook based on the better-than-expected sales of mobile and PC products. Analysts polled by Thomson Reuters currently expect revenues of $285.75 million for the fourth quarter.

The company expects full-year 2014 revenues of $933.0 million to $943.0 million, an increase of 41 to 42 percent. Initially, the company expected top-line growth of 37 to 40 percent for fiscal year 2014. Analysts currently expect revenues of $918.49 million for 2014.

SYNA closed Tuesday's trading at $66.52, down $0.89 or 1.32%, on the Nasdaq. The stock, however, gained $12.23 or 18.39%, in the after-hours trade.