Internet of Things chipmaker Synaptics (SYNA) stepped up its diversification drive on Monday by announcing a deal to buy wireless chipmaker DSP Group (DSPG). SYNA stock rose modestly while DSPG stock rocketed on the news.
San Jose, Calif.-based Synaptics agreed to pay $22 a share for crosstown peer DSP Group. The acquisition has an enterprise value about $450 million, net of DSP cash on hand of about $130 million. The companies expect the transaction to close by the end of the year.
In morning trading on the stock market today, SYNA stock rose 1.5%, near 184.30. DSPG stock surged 17.6%, near 21.95.
Synaptics is diversifying from its legacy business of touch pad and display controller products for PCs and smartphones. In recent years, it has added connectivity and AI-enhanced video, vision, audio, speech and security processing.
DSP Group makes voice and wireless chipsets for communications and IoT applications.
SYNA Stock Extended From Breakout
The DSP Group acquisition is the latest strategic move by Synaptics Chief Executive Michael Hurlston, who joined the company in August 2019.
When Hurlston joined Synaptics, SYNA stock was trading near 34. In intraday trading on Monday, SYNA stock notched a record high of 184.57.
On June 14, SYNA stock broke out of a cup base at a buy point of 147.03, according to IBD MarketSmith charts. On Monday, it was trading in the 20%-to-25% profit-taking zone, based on IBD trading principles.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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