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Bluefin Research Reviews Analog Devices-Linear Technology Deal

Analog Devices, Inc. ADI 1.43% announced the acquisition of Linear Technology Corporation LLTC 4.14% for nearly $15 billion, in a cash and stock deal. Bluefin Research’s Paul Peterson commented that the deal was a significant positive for Analog Devices.

Huge Portfolio Added

The addition of Linear’s revenues pushes Analog Devices to the second position among analog IC suppliers, behind only Texas Instruments Incorporated TXN 1.43%. Analog Devices indicated that Linear’s product portfolio would expand its TAM from $8B to $14B.

“ADI has long been our favorite name in the high performance analog space…Our lone criticism of the company’s portfolio was a lack of power management strategy…ADI responded with this blockbuster deal that now gives them the most highly coveted power management franchise in the industry,” analyst Paul Peterson wrote.

Ideal Marriage

Peterson mentioned that the deal was a good combination from a product perspective. It would come with Linear’s robust power management franchise providing, which was the “missing link” for Analog Devices, the strengths of which lie in its dominant signal chain portfolio, industry leadership in RF & microwave, and a foothold in the market for amplifiers and interface products.

“In our view, this could be the most complimentary large scale acquisition in the history of the semiconductor industry,” the analyst wrote.

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