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Hauppauge tech firm to be sold to Arizona firm
An Arizona company has agreed to buy Hauppaugue-based Standard Microsystems Corp., known as SMSC, in an $939 million deal, the companies said Wednesday.
Investors reacted to the news by pushing the company's stock up 38.8 percent Wednesday to close at $36.43. The stock closed Tuesday at $26.24. Trading was heavy, with 15 million shares traded, compared to an average daily trading volume of 128,000.
SMSC, with about 1,000 workers, sells integrated circuits, USB, Ethernet and wireless components to computer makers and automakers. Its products form the core of entertainment and information systems for various models of Porsche, Toyota, Audi, BMW, Daimler, Jaguar and Volvo vehicles.
The buyer, Microchip Technology Inc., a maker of microcontroller, analog and Flash-IP devices, said it has "signed a definitive agreement to acquire Standard Microsystems Corp. for $37 per share in cash."
Boards of both companies agreed to the sale, which will take effect in the third quarter of this year.
“This transaction represents a compelling opportunity for SMSC employees, customers and stockholders by combining the leading market position and world class operational excellence of Microchip Technology with the world class smart mixed-signal connectivity solutions from SMSC,” Christine King, president and chief executive of SMSC, said in a news release.
Newsday reported April 11 that SMSC's financial results showed a dip in quarterly revenue and profit, compared to the same quarter last year, but optimistic expectations from the company led to a spike in its stock price and daily trading volume.
SMSC said it expected significant growth in its automotive products for the coming year, amid predictions that carmakers will continue to rebound.