Today: Touchscreen chipmaker Synaptics roars to all-time highs after announcing the planned acquisition of a Japanese rival for almost half a billion dollars. Also: Google makes its own half-billion-dollar acquisition.
The Lead: Synaptics plans $475 million acquisition of Renesas display firm
San Jose touchscreen chipmaker Synaptics announced Tuesday afternoon that it had committed $475 million to acquire a similar Japanese business, and the company's shares roared to their highest recorded levels in after-hours trading.
Synaptics said that it agreed to pay 48.5 billion yen for Renesas SP Drivers, a company formed as a partnership by Renesas, Sharp and Powerchip to offer the guts of LCD touchscreens, which Synaptics expects will increase its customer base by 50 percent. The company's focus on the electronic guts that allow users' fingers to control mobile devices has already led it to booming sales figures, and Tuesday's move is expected to further that success.
"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 No. 1 touchscreen controller supplier to the mobile display market," Synaptics CEO Rick Bergman said in Tuesday's announcement.
Even before the deal, Synaptics was soaring: The company also increased its financial forecasts in a separate announcement Tuesday, reporting expectations for record sales of more than $300 million in the current quarter and full-year revenues of at least $933 million, 41 percent higher than the previous year. Synaptics reported that Renesas SP Drivers recorded sales of $650 million in its most recent fiscal year, which ended in March, which would help revenue growth continue into 2015 -- the deal is expected to close by the end of this calendar year.
The twin announcements sent Synaptics stock soaring in after-hours trades to what would be record highs. After closing with a 1.3 percent loss at $66.52, shares moved higher than the company's previous all-time high of $69.31 and kept moving higher to top $78 by 2:30 p.m. Pacific time.
Synaptics has already shown the ability to ride acquisitions to big gains, with the 2013 purchase of Validity Sensors allowing the company to find success in the new yet growing market for fingerprint sensors on mobile devices. With Synaptics' non-Apple clients such as Samsung growing their market share against the Cupertino tech giant, the company boosted sales 52.4 percent in 2013 while profits more than tripled, making it the 61st largest Silicon Valley technology company in terms of revenues.
SV150 market report: Stocks gain as Google reveals another big-money buy
Wall Street barely moved Tuesday, but Silicon Valley tech stocks showed gains as Google beat Synaptics to the punch with its own $500 million acquisition and Apple kept gaining after its stock split.
Google confirmed the $500 million purchase of Skybox, a Mountain View satellite company that the Web giant could use to beam Internet service to underserved communities throughout the world. Google is expected to improve its satellite imaging for Google Maps with Tuesday's purchase, but could use the technology in the future for its ambitions to expand Internet access globally, an effort that thus far has focused on using large balloons. The large purchase is another in a series of so-called moonshots for Google, which spent $3.2 billion for Mountain View connected-home appliance company Nest earlier this year and already acquired a drone company that could also be used to expand global Internet service; Google has also disclosed that it has a $30 billion pot from which it hopes to acquire foreign companies. Google stock declined 0.4 percent to $568.30 on the day.
Apple continued to post new 52-week highs in its second trading day after a 7-for-1 stock split that brought the company's share price lower than $100, gaining 0.6 percent to $94.25 while possibly being investigated in Europe for its tax practices. eBay fell 2.7 percent to $48.25 a day after disclosing the departure of PayPal President David Marcus, and reports suggested the San Jose e-commerce company is planning to kill its same-day delivery service. Oracle declined 0.1 percent to $42.66 as CEO Larry Ellison showed off new database offerings expected to speed up business processes, and Salesforce gained 2.6 percent to $53.06 after unveiling an app-development platform for wearables. Social-networking stocks were hot ahead of the start of the World Cup, which is expected to produce a wealth of status updates: Twitter gained 2.6 percent to $35.37 after an upgrade from Wells Fargo, Facebook jumped 4.6 percent to $65.77, LinkedIn added 4.7 percent to $163.68 and Zynga moved 6.7 percent higher to $3.20.
Up: Zynga, LinkedIn, Facebook, AMD, Twitter, Salesforce, Electronic Arts, Intel, Netflix, Cisco, Yahoo, Gilead, Apple, Nvidia, SunPower
Down: eBay, Tesla, Pandora, SanDisk, SolarCity, Intuit, Yelp, Workday, Symantec, Google, Hewlett-Packard
The SV150 index of Silicon Valley's largest tech companies: Up 8.29, or 0.57 percent, to 1,470.66
The tech-heavy Nasdaq composite index: Up 1.75, or 0.04 percent, to 4,338
The blue chip Dow Jones industrial average: Up 2.82, or 0.02 percent, to 16,945.92
And the widely watched Standard & Poor's 500 index: Down 0.48, or 0.02 percent, to 1,950.79